Podcast Summary
From struggling publicly traded company to $1 billion valuation: Andrew Wilkinson transformed a small business into a large publicly traded company, demonstrating perseverance and entrepreneurial spirit, despite initial uncertainty.
Andrew Wilkinson, a friend of the podcast, is set to make around $700 million to $800 million from his company Tiny, which is going public at a nearly $1 billion valuation. This success comes from his bootstrapped agency that grew into a company buying other businesses. His journey from a struggling publicly traded company, WeCommerce, to this impressive feat is remarkable and a testament to his entrepreneurial spirit. Despite some uncertainty about the actual trading price, this achievement is significant and a great example of perseverance and growth. It's an inspiring story of turning a small business into a large publicly traded company.
HubSpot's Customer Platform: Personalized Experience and Growth: HubSpot's customer platform offers a personalized experience through AI-supported features, leading to significant revenue and EBITDA growth. The company's success is attributed to its attractive software design, low labor costs, and strategic acquisitions.
HubSpot's customer platform provides a single source of truth for businesses, allowing for easy organization and tracking of customer interactions. This platform includes AI-supported features that help determine the appropriate messaging for different customers, creating a personalized experience. The success of this platform is demonstrated by HubSpot's own growth, which has seen the company reach $150 million in revenue and $50 million in EBITDA. This growth can be attributed to the company's ability to charge high-end prices while paying lower wages due to its location in British Columbia, Canada. Founder Brian Halligan started as a web design agency, MetaLab, in 2006, and by 2023, the company is projected to have revenue in the $40-$50 million range. The ease of adoption and attractive design of HubSpot's software, compared to other CRMs, has contributed to its success. Halligan's strategy of buying companies instead of launching new ones, inspired by Warren Buffett, has also played a role in the company's growth.
Buying the Right Companies Can Transform a Business: Identifying and acquiring companies with high growth potential can significantly grow a business, even if they lack initial profitability.
Successful businesses can be built through strategic acquisitions, even with a relatively short timeframe. Andrew Wilkinson, who started MetaLab in 2006, began buying other companies in 2016. One of these acquisitions, Dribbble, was a game-changer, transforming from a small platform into a multi-million dollar business. Wilkinson bought Dribbble from founders who lacked business expertise, and turned it into a major asset for his company, Tiny, which he plans to take public. Tiny now owns over 15 companies, with MetaLab serving as the primary revenue generator. Wilkinson and his partner own 80% of Tiny, making it a significant publicly-traded entity. The success of Tiny demonstrates the value of identifying and acquiring companies with high growth potential, even if they lack initial profitability.
Focusing on a few key investments pays off: Successful entrepreneur Troy Carruthers built a successful investment empire by focusing on a few winning investments, using profits for acquisitions, and exhibiting financial expertise.
The discussed entrepreneur, Troy Carruthers, built a successful empire by focusing on a few key winning investments rather than spreading his resources evenly among multiple companies. These winners, such as Shopify, Dribbble, and MetaLab, compounded at a high rate and contributed significantly to his portfolio's revenue and EBITDA. Carruthers also stood out from competitors by using his own company's profits to fund acquisitions, creating a simple and effective term sheet for deals, and building a strong brand for his investment firm. Another important aspect of his success was his patience and strategic timing, as he started his investment journey in 2006 but didn't hit his stride until 2016. By avoiding the need to raise external funds, Carruthers had the freedom to make decisions based on his own priorities and financial goals. His expertise in financial maneuvering, including taking WeCommerce public via SPAC, further added value to his investments. Overall, Carruthers' unique approach, focus on key investments, and financial acumen contributed to his impressive success in the software investment space.
Effective hiring, negotiation, and management are crucial components of building a successful business.: Andrew Wilkinson built a successful business by hiring talent from countries with lower wages, effective negotiation, and hands-off management. Authentic storytelling also played a role in his acquisition announcement.
Where you live and the cost of talent can significantly impact your business, but effective hiring, negotiation, and management are key to building a successful team. Andrew Wilkinson, the founder of MetaLab, provides an excellent example of this. He's built a successful business by hiring talent from countries with lower wages than Silicon Valley, such as India. However, his success doesn't come solely from cost savings. Wilkinson is also an impressive negotiator and manager, able to keep his CEOs happy while retaining equity. He's known for his hands-off approach, only stepping in when necessary. His storytelling skills, as demonstrated in his Dribbble 2.0 blog post, also contribute to his success. When it came time to announce the acquisition of Dribbble, Wilkinson didn't follow the typical soulless press release. Instead, he shared his personal connection to the company and its founder, Dan Cederholm, making the announcement more authentic and engaging. Overall, Wilkinson's story illustrates that while location and cost are factors, effective hiring, negotiation, and management are crucial components of building a successful business.
Staying true to one's vision despite challenges: Determination, a long-term view, and commitment to one's vision can lead to exceptional outcomes. Don't be afraid to be bold and do things differently.
Successful entrepreneurs like Andrew Wilkinson don't just follow the average path to building a business. Instead, they have a bold and persistent vision, and they stay true to it despite criticism and challenges. Wilkinson's acquisition of Tiny, which he had long admired, is a prime example of this. He didn't let the fact that he was in Canada or that he didn't have the typical venture capital backing hold him back. Instead, he persisted in his pursuit, and eventually, the founders of Tiny saw his value and agreed to a deal. Wilkinson's story is inspiring because it shows that determination, a long-term view, and a commitment to staying true to one's vision can lead to exceptional outcomes. It's a reminder that success often comes from doing things differently and not being afraid to be bold.
Former NBA player Brian Scalabrini proves self despite being a benchwarmer: Former NBA player Brian Scalabrini continued to improve and prove himself despite being a benchwarmer, inspiring us to never give up on ourselves and our potential.
No matter where you are in life or what your abilities are, there's always room for growth and the opportunity to prove yourself. Brian Scalabrini, a former NBA player, is a great example of this. Despite being a benchwarmer for most of his career, he continued to play recreational basketball and consistently outscored his opponents. When people doubted him online, he challenged them to play him 1 on 1 and proved them wrong. He even went so far as to travel around the country to play on the toughest basketball courts. Scalabrini's quote, "let's get something straight. I'm closer to LeBron than you are to me," highlights the idea that everyone has their own level of greatness and that it's important not to compare ourselves to others unfairly. Scalabrini's story is a reminder that we should never give up on ourselves and that we all have the potential to surprise those who doubt us.
Unconventional marketing strategies for women's sports leagues: Livestreaming pick-up games between top female athletes and local male players, or creating viral content comparing their abilities to relatable experiences, can generate buzz and challenge stereotypes, increasing interest in women's sports.
To increase the viewership and interest in women's sports leagues, such as the WNBA, unconventional marketing strategies could be effective. During a conversation, the idea of having the top female athletes go on a tour and challenge local male players in pick-up games, livestreamed or clipped for social media, was suggested. This concept was inspired by the observation that people often wonder if they could beat female athletes they see on TV. The success of viral content that compares elite athletes' abilities to relatable experiences was also highlighted, such as the treadmill challenge comparing viewers to Eluid Kipchoge's marathon performance. These strategies aim to create buzz, challenge stereotypes, and ultimately, bring more attention to women's sports.
Small opportunities can lead to big gains: Recognizing potential in small opportunities and giving them the right attention can lead to substantial gains. Be open to considering the ideas of others and giving them a chance, even if they seem insignificant at first.
Sometimes opportunities, even those that seem insignificant at first, can lead to substantial gains if given the right attention and follow-through. In this story, the speaker missed out on investing in a company that is now worth billions, but he also discovered a talented young scout who ultimately introduced him to ApplyBoard, a successful company he did invest in. Despite his financial situation at the time, the speaker recognized the potential in the idea and gave the young scout a chance. This experience serves as a reminder that every interaction and opportunity, no matter how small, has the potential to lead to something significant. Additionally, the speaker's willingness to listen and consider the ideas of others, even when he had no initial plans to act on them, ultimately paid off.
Addressing surge pricing for international students: Israeli startup Effortless aims to make college application process easier and more affordable for international students with a diverse team, proven business model, and interest from universities.
There's a significant issue with surge pricing for international students in American colleges, and a company named Effortless is looking to address this problem. The company, founded by a charismatic Israeli entrepreneur, started as an offline consulting business and pivoted into a software solution. They have a diverse team with a unique skill set and a proven business model with a low customer acquisition cost and high customer lifetime value. The company has already gained the interest of universities, who are willing to pay a significant amount for each student they refer to Effortless. The company's goal is to make the college application process easier and more affordable for international students, which is a pressing issue as these students often pay exorbitant fees for the same education as domestic students. The company's potential for sustainable growth and positive impact on the education system makes it an attractive investment opportunity.
Lesson learned: Be prepared before investing: Investing comes with risks, so be financially ready and follow through on commitments to avoid missed opportunities.
Investing, especially at an early stage, comes with risks and uncertainties. The speaker in this story learned this lesson the hard way when he committed to investing in a startup but then hesitated and ultimately didn't follow through. He regretted his decision when the startup became successful years later. Therefore, it's crucial to have a clear understanding of one's financial capabilities and readiness before making an investment. Another key takeaway is the importance of following through on commitments. The speaker's indecisiveness and lack of communication with the startup founder may have cost him a valuable opportunity. Overall, this experience served as a valuable lesson for the speaker to be more confident in his decisions and to be prepared before making an investment.
Missing opportunities due to fear: Overcome fear by getting resources or partners to seize opportunities and learn from young, hungry, and ignorant individuals
Fear can hinder opportunities, and it's essential to find a way to overcome it. In the speaker's experience, they missed out on a potential investment opportunity due to fear and embarrassment. However, they learned that finding a way to get the necessary resources or bringing in a partner can lead to significant gains. Another strategy the speaker mentioned was surrounding oneself with young, hungry, and ignorant individuals, who, despite their lack of experience, bring a unique perspective and energy. By embracing this approach, individuals can learn from those around them and potentially discover new opportunities.
Discovering and investing in young creators: Investing in and mentoring young creators can lead to significant business success. Fresh perspectives and innovation can be brought to the table, helping to expand existing businesses.
Investing in and mentoring young, creative individuals can lead to significant success. A year ago, Sean and I discovered Michael, a TikTok creator from our podcast, who reached tens of millions of people with his videos. We encouraged him to turn his hobby into a business, providing him with our initial investment. Michael, who was still in college at the time, went on to sell his company to Morning Brew. Although a large percentage of his ideas were nonsensical, Sean recognized his potential and encouraged him to keep going. Michael's unique perspective and energy brought new ideas to the table, which helped Sean expand his own business. The "young blood strategy" is a valuable approach, as it allows for fresh perspectives and innovation. By providing guidance and support, older generations can help young creators turn their ideas into successful businesses.
Investing in young individuals and ideas can lead to significant financial gains: Surrounding oneself with promising young people and believing in their potential can result in substantial financial returns through crypto investments, illiquid stocks, or angel investments.
Investing in young, promising individuals and ideas can lead to significant financial gains. The stories of Soroush, Ishan, and the unnamed friend illustrate this concept perfectly. Soroush made a fortune from crypto investments, while Ishan turned $100 into millions by buying an illiquid stock. The friend made $30 million from an angel investment in a startup founded by a former employee. These individuals took risks and saw great returns, demonstrating the potential rewards of investing in the next generation. It's important to surround oneself with promising young people and believe in their potential, as the returns can be substantial.
Supporting creators is a gentleman's agreement: Show appreciation for creators' hard work by subscribing or following their content, building a community of engaged followers.
The content being discussed in this podcast is not free. The creators have invested significant time, effort, and financial resources into producing it, and they ask that listeners show their support by subscribing to their YouTube channel or following their podcast. This not only helps the creators continue producing high-quality content but also builds a community of engaged and dedicated followers. The creators value their audience's commitment and interaction, reading and responding to comments on their YouTube channel. This is a gentleman's agreement between the creators and their audience, and it's a small price to pay for access to valuable and entertaining content.
