Asking A Billionaire Investor How To Prepare For The Economic Collapse (#371)

Andrew Wilkinson

I'm mostly holding cash and waiting for winter to come. I'm going to buy businesses personally as well. What really... I just want businesses.

Sam Parr

You don't own any Vanguard index fund stuff? You just are literally sitting on, I imagine, tens of millions of dollars of treasury bills.

Shaan Puri

Yep, alright! On today's episode, we have Andrew Wilkinson joining us. If you don't know, you gotta know: Andrew is the creator of Tiny. He owns like, I don't know, 20 to 30 businesses at this point. They own Dribbble, they own AeroPress—basically, he buys and sells businesses with a total value of maybe over $1,000,000,000. Definitely over $100,000,000 in revenue. He's sort of known as the "Warren Buffett of the internet," or that's the model he chose to create. He didn't take the startup path where he creates one genius idea. He didn't follow the investor path where he's just putting small checks into these companies. Instead, he finds these little gems of businesses and buys them. He's been doing this for, you know, I don't know, 10 to 15 years now. Andrew's become a good friend; he's a friend of the pod and listens to the pod, so he knows the vibe. He's probably the most well-liked guest that we have, so we're always happy to have him back. In this episode, we talk about preparing for winter—what moves he's making or has made in order to prepare for, you know, what's going on in the economy. We discuss what he's doing in his business, what he's investing in, that sort of thing. We also talk about a couple of his new ideas or businesses that he started, like "Negotiating as a Service" or procurement, as I'm told. There's also this other company called... actually, I don't want to give it all away, but he talks about a couple of the ideas he's working on. Then we go on some tangents about why you should only rent your house and not buy houses. We discuss different ways that he gets together with other entrepreneurs and groups. It's a good episode—about an hour and a half. I think you'll like it. Alright, enjoy this episode!

Sam Parr

dude wait hold on sean I haven't seen you in

Sam Parr

a minute where are you where you you good

Shaan Puri

Oh dude, I've been literally sitting at Tesla charging stations for like the last year of my life, it feels like. I made a horrific mistake of renting a Tesla for a road trip.

Sam Parr

where'd you go

Shaan Puri

Just from here to LA, from the Bay to LA, and I thought, "Okay, that's cool. Might have to stop once or twice." It had stopped 5 times. Basically, every 90 minutes I had to stop for 30 minutes. It was awful.

Sam Parr

how fast were you going were you going above 80

Shaan Puri

No, nothing fast. Two kids in the back and a bunch of, you know, snacks. I was like, "Oh, this is... this is not like some... this is not me." That's how I felt. That's how I felt towards the car. I was like, "Apparently this isn't what most Teslas would be like." But the Tesla I had rented, you know, was not the greatest, which kinda sucked because this was my "sell my wife on a Tesla" as the next car trip. And yeah, it had the opposite effect.

Andrew Wilkinson

You know what's interesting is, I bought a Tesla maybe 8 or 9 years ago, and it was insane. It felt like, you know, going to the future or whatever. I just bought the new BMW iX, which is like their electric SUV. You realize that the main feature of the Tesla is how quiet and fast it accelerates. Instead of being a Tesla feature, you realize, "Oh, that's just an electric car feature." As soon as I get in my BMW, I plug in CarPlay, so it's like the Apple interface. You realize that at the end of the day, these electric cars really don't have any competitive advantage. You know, Tesla, frankly, the interior is so much worse than BMW and all these German and American manufacturers. So, I'm really curious to see how it all plays out now.

Sam Parr

Yeah, they've done such a good job of rebranding fake leather to "vegan interior," and that's what...

Sam Parr

They say it's vegan-friendly interior. I'm like, "Oh, you're just low quality," like the fake leather and whenever I...

Sam Parr

sit in them they feel like plastic I'm not a tesla fan I also think that they're like super not sexy

Andrew Wilkinson

Yeah, like the Model X looks like a weird big toe or something. I mean, I think they're great cars; I really like them. But I just think that everyone overestimated their competitive advantage. At the end of the day, you've got all these legacy manufacturers. And, you know, ultimately, if Apple and Google are providing the interface that most people use, it barely matters, right? It's just like a platform with an electric motor that takes you from A to B. Then, you know, if it doesn't work with your iPhone or your Android, and if you look at the Tesla interface, it's like really bad. You can't sync your maps up on the screen or anything like that. It's not great.

Sam Parr

so sean you're not getting one

Shaan Puri

actually I still probably will get one but yeah I gotta like do research and shit now like I joined the subreddit for tesla fans it's so crazy by the way how many products are just for tesla owners because you basically have I don't know how many million but like like in the subreddit alone there's 2,000,000 members and that's and that's reddit reddit's like the niche part of it right so like I don't know exactly how many cars tesla has sold now but somebody somebody can grab that I think they're doing they did like a 1,000,000 this quarter delivered or something like that something crazy like a huge huge jump but let's say that there's 5,000,000 teslas out there those are 5,000,000 high net worth people who can be targeted with specific products and I've seen some people do this one guy had this thing called tesla I forgot what it's called like tesla camper or some shit like that and it basically would turn the trunk of your tesla if you fold down the back seat and you open up the trunk of it it it would turn it into like a sleeper van and it was just like a bed that goes in the back of a tesla it's perfectly made to fit in the back of a tesla it looks sleek like a tesla thing and it was like and they were doing like you know they're doing pretty well these guys would do 7 figures on just just this one product with very minimal ad spend because they can go highly targeted with content instagram and stuff like that to to reach tesla owners and then same thing people selling these adapters that let you charge everywhere or there's an app because I was like trying to plan the road trip and I just typed in the destination and like it gives you a suggestion on where to stop to charge but it wasn't great that's why I stopped 5 times I was like there had to be a better more optimal route than this and there's some old ass app called a better route planner or something like that abrp and it's like the number one ranked thing the interface looks like it's you know from the nineties and it just does a slightly better job at like giving you some custom control over what what charging stations you should hit on a on a trip and I just realized like wow there's this is like a it's like rolex owners or things like that like these high net worth communities that are super passionate and they're locked into that ecosystem you know apple being the biggest example of this like the big the the apple blogs that's that were out early on

Sam Parr

got huge

Shaan Puri

over time this like there's the same opportunity with tesla and and other products like that

Sam Parr

that's awesome yeah maybe maybe I'll be getting one too but we'll see

Shaan Puri

So, we should reintroduce Andrew. Andrew Wilkins is back—definitely the number one guest of the pod, both in our hearts and the fans' hearts. I don't know why we don't schedule more of these, because we should. Every quarter or so, Andrew just texts us, saying, "Hey, I want to come on. I got stuff." And we're like, "Great! Pick a day, let's do this." So, he's back. He's the founder and CEO of Tiny, and they buy beautiful internet businesses. He's done a bunch of pods with us in the past explaining that stuff. But also, do you still listen to the pod regularly?

Sam Parr

I know

Shaan Puri

you used to listen to the sauna at night

Andrew Wilkinson

yeah all the time I take little breaks because I get too pumped up sometimes when I listen like in

Sam Parr

the song

Andrew Wilkinson

frequently that's

Shaan Puri

a nice

Andrew Wilkinson

way to explain I listen in the shower or the song usually

Sam Parr

alright but

Andrew Wilkinson

if that lasts for more than 4 hours or so I'm always fully I'm always fully nude when I listen to

Sam Parr

you guys yeah

Shaan Puri

would it make you feel comfortable now if we turn the cameras off and pick off our clothes

Sam Parr

we can do it that way

Andrew Wilkinson

that would be ideal so you had a

Shaan Puri

bunch of ideas or topics sam you wanna go to

Sam Parr

yeah so you got you have a bunch of good shit you where do

Sam Parr

you so we're gonna talk about like what

Sam Parr

You're doing for winter, meaning like what you're doing with your personal and business finances, given that the economy may not be going well. We're going to talk about different ideas that you have. I want to discuss the anonymized workers. So, you've been hiring some anonymous folks, and then you also have like 5 or 6 companies that you've started. We're going to do a post-mortem on them and say what went well and what didn't go well. So, Sean...

Shaan Puri

you're let's start with winter

Sam Parr

Yeah, alright, great. I was gonna say, you drive, Sean, because Andrew already told me a lot of his stuff. So, I want you to tell me what's most interesting.

Shaan Puri

Yeah, let's start with winter. Andrew, maybe tee it off. I think there is a consensus now that we're either in a recession or going to be in a recession, and that this is not going to end soon. Give me your take on what yours is.

Andrew Wilkinson

what your view is of

Shaan Puri

the market and then what are you doing to prepare for that situation

Andrew Wilkinson

yeah I mean there's this great quote by andy grove only the paranoid survive ultimately none of us know what's gonna happen right we could have a rebound I was super terrified like when covid hit I thought the world was gonna fall apart and it didn't but what I do when something like this happens is I stress test my business so if you think about it like if you're about to drive your family in a minivan across a large bridge that's like you know a kilometer in the sky and there's a 1 in 20 chance that bridge can't take the weight of your car you don't wanna drive across right doesn't matter if you're probably gonna be fine you just don't wanna go across and so I think you wanna stress test and over engineer your business for all the worst case scenarios and so effectively you know that's what I've been thinking about a lot and I think what people miss is there's 2 ways that you know something like this can go bad right the worst way it can go bad is total loss right you go bankrupt your business fails you're embarrassed it's terrible I think that's the worst but the less bad option that no one really talks about is missing opportunity so you get presented with something incredible and you're illiquid you can't take advantage of it so for example let's say you're an ecommerce company and suddenly ad rates drop you know 5 x and you could go out and take the market and sell shitloads of your product you can't do that because you're you're a liquid or you're just barely holding on you don't have any cash reserves maybe there's an amazing acquisition you can merge or take over a competitor or something but you can't do that so you get instead of errors of omission you get errors of commission you're not able to actually execute on those opportunities and so you know I've been thinking a lot about this over the last couple of months and generally we operate quite conservatively our goal is like you know any debt we have we wanna be able to pay it off pretty much at any time we try and keep as much cash as we can ahead office but there's a couple specific things that we're doing that I figured I'd share that could be useful look can you start with

Shaan Puri

What is a stress test? That sounds cool! I want to stress test my business. Great! I sit down today, and what the heck am I going to do to do that?

Andrew Wilkinson

Okay, so you would say, "What happens if revenue drops 50% in this business?" Are you able to lay people off? Is that a possibility? Are you stuck in a bunch of long-term contracts and leases that you can't get out of? Do you have a lot of debt that you can't pay? You know, you're really modeling out. What I'll do is just create a simple spreadsheet and say, "Okay, if revenue goes up by 20%, here's what it looks like. If it goes down by 20%, if it goes down by 50%, if it goes down by 70%." For example, one thing that often happens is you still have customers, but in many businesses, they have accounts receivable, and people stop paying. So, people are going to pay you, but they might just pay you late—maybe in 90 days or 120 days. So, what happens if no one pays you for 2 or 3 months? Do you have enough money in the bank? Do you have credit lines, etc.? I think, you know, it's really wise to kind of do that shadow boxing and imagine a bunch of nightmare scenarios so that you can sleep at night.

Sam Parr

great what is it

Shaan Puri

yeah go ahead

Sam Parr

actually continue where you're going continue where we're going then I'm

Sam Parr

gonna ask you a question

Andrew Wilkinson

yeah okay so I'll talk a little bit about like what we're specifically doing so everyone always says you know the best companies get started by a and during a recession which is absolutely true but at the end of the day I am not gonna be putting a lot of money into crazy venture bets and what I mean by that is I'm not gonna be taking like a lot of risk right so I'm not gonna go and invest in the e commerce company with 500 ks of revenue at a $12,000,000 valuation I'll still keep betting on new companies but I'm doing it in a much more conservative way so for example we have an angellist rolling fund we invest about $12,000,000 a year there and I'm pivoting it to totally focus on secondary and minority buyouts so for example a founder who gets cold feet or wants to buy out their business partner something like that I'll do non binary deals so what I mean by that is like if revenue and earnings get to where they say they're gonna be the valuation is one thing if they don't the valuation is another so kind of our investors win in either scenario and then the other one is like structured deals so for example saying to someone look I'll give you a $5,000,000 valuation but I want a guaranteed 15% return in the case of liquidation or dividends and that kind of stuff and then also I mean you guys have talked about this a lot but the idea of default alive I wanna be investing in businesses where if they can't raise the next round they're not going out of business and then the the other thing with venture is like we've realized too we can do venture internally by incubating businesses with low downside so for example like turning our p and l expenses into businesses in and of themselves so for example like we want better procurement internally we wanna negotiate rates and get our p and l under control and so we started a business to do that we want to you know get better credit across all of our businesses we started another business to do that so that's the kind of stuff we're doing with venture

Sam Parr

we just we just talked all about that the other day

Shaan Puri

and what was your take sam

Sam Parr

on what

Shaan Puri

On what he just said, I think it's... I should do that. I am doing that, or I'm doing something different.

Sam Parr

Part of me thinks that, like, that's a little... well, I personally wouldn't do that because I'm like, "Man, when shit gets bad, I get afraid." I just want to focus, focus, focus. When I think of you starting something new, I'm like, "Whoa, aren't you going to have to allocate like another $500,000 to this salary for Buyer.co?" Or, you know, however many of the salaries. How much is it going to cost to do a new website? So I get nervous about that. Are you not baking those into like new expenses? Are you saying, "Look, I could just go and cut costs and save a little bit of money, or I could go spend a little bit more money and build a company around it?"

Andrew Wilkinson

Well, I'm looking at businesses. There have been businesses where, okay, here's an example. When we started Buyer, which is our negotiation service for software that we launched two years ago, we ended up selling it to Ramp. I think we started that business for $50,000. At the end of the day, we're looking at it and going, "This is a very low-risk bet." We're basically finding someone who wants to start a company. We're giving them all the tools to do it, and we're going to partner with them and provide all the capital. But at the end of the day, we're looking at really, really simple, capital-light businesses that can generate revenue within like two or three months. I don't want something... I mean, I've done... I can talk about this later, but I've done businesses where we go for ten years and are never profitable. We're just pouring good money after bad. You know, I don't do that anymore.

Sam Parr

What are you doing with your personal portfolio at the moment? What's that like? What do those percentages look like? Where is each thing?

Andrew Wilkinson

So basically, it's cash. I have treasury bills, and the only stock I hold right now is Pershing Square Holdings. The reason I really like that is, it's trading for far less than the value of the underlying assets. It's a holding company that owns a bunch of blue-chip stocks, and it's trading at about 66% of the net asset value. So if there's $100 of stocks, you're paying 66 cents. They also are highly hedged.

Shaan Puri

Most of these, kind of like holding company types, trade at a discount anyway.

Andrew Wilkinson

Not to this degree, right? At the end of the day, like, this is why it is for the type of fund it is. Well, I think there's a variety of different reasons. I mean, it's illiquid, it's traded in Europe, and it's run by Bill Ackman, who has had, you know, a few blow-ups. People associate him with blow-ups. If you actually look at his record, he's killed it. And the other thing I like about that business, by the way, is that they own a very large position in interest rate swaptions. So, as interest rates go up, the fund actually does better. If you look at the net asset value over the last four weeks, it's barely moved while the larger market has gone down significantly. But anyway, I'm mostly holding cash and waiting for winter to come, and I'm going to buy businesses personally as well. What really... I just, yeah, I just want businesses.

Sam Parr

You don't own any Vanguard index fund stuff? You just are literally sitting on, I imagine, tens of millions of dollars in treasury bills.

Andrew Wilkinson

yep and that's wild

Shaan Puri

What do you do? I guess, where is your main focus with your balance sheet? How much of your worth is in your personal accounts versus, let's say, if you think about your net worth? How much of it is associated inside your business, Tiny? You need to be smart about what you're doing inside Tiny versus your personal accounts. I think for most entrepreneurs, most of their net worth is in their business, and then their personal checking accounts, savings accounts, and stock trading accounts are much smaller in comparison.

Andrew Wilkinson

Yeah, I'm like 90% in Tiny. But what I have done is I've had liquidity and other things outside of Tiny. You know, Tiny is a holding company that I co-own with Chris. There have been other assets, like legacy assets, that have sold or cash flowed. I've taken that money, compounded it, and done stuff with it personally. The way I look at my personal money is that if everything goes pear-shaped with Tiny, I still want to make sure that I can retire, be free, and have enough money to do stuff. So it's a little bit more conventional. But you know what's funny? You're like, "Oh, you don't have ETFs." As far as I'm concerned, I do have an ETF because Pershing Square Holdings owns 10 positions, right? So it's a diversified stock portfolio, and it just happens to be managed by Bill.

Sam Parr

What percentage of your net worth, or sorry, if you have one number in Treasury bills, how does that compare to the other number in Pershing Square?

Andrew Wilkinson

I think it's 5050 right now

Sam Parr

And one thing that I've been following, basically like two years ago, or a year ago, you own or co-own... you're a major... or I actually don't know what your percentage is. I think it's in the annual report, but you own WeCommerce, which is...

Andrew Wilkinson

yeah

Sam Parr

A collection of Shopify plugins, as well as a few other products, is like a really, really good business. I forget what it said in the annual report, but it's publicly traded. It's like $50 or $60 million a year in annual revenue, and its peak stock was like $600 million. It was crushing it. Now, like the rest of tech, it's just been decimated to like... I, what is it today? I...

Andrew Wilkinson

think it's like 80,000,000 or something let me

Sam Parr

so how does it feel like you're the only person I know

Sam Parr

Who's like this wealthy... Well, I know we talked to Dharmesh. Dharmesh was like, "Yeah, I lost like $200 million to $300 million the other day." How's that feel like?

Sam Parr

What's your perspective and where are your emotions when you're seeing this thing destroy it and be amazing at $600,000,000 all the way down to $80? How do you feel about that?

Andrew Wilkinson

So, I think if I was just like a pure entrepreneur... One of the interesting phenomena I've seen is that people who are great entrepreneurs often remain just that. They don't become investors; they don't like thinking about the stock market and finance and stuff. I actually really enjoy that side, and so I've spent the last 10 years learning about investing and reading about Warren Buffett. Warren Buffett's mentor, Benjamin Graham, has this whole idea of "Mr. Market." Right, so the stock market is like this moody person. It goes up and down. At the end of the day, if you know what your business is worth, it's irrelevant what the stock market says it's worth. So personally, I mean, yeah, like sure, there's a little bit of an ego hit seeing your net worth have some zeros pulled off.

Shaan Puri

of it but at the end of the

Andrew Wilkinson

For me, that number is made up anyway. So, it really doesn't affect me day to day. I just ask myself, "Do I still own a great business?"

Sam Parr

Well, and you're personally fine. You've got liquidity and you have all these other things going on. But, like, I imagine... let...

Shaan Puri

me put it let

Andrew Wilkinson

Let me put it this way. There's a great Buffett story. He says, "You know, Sam, let's say you own a farm and it makes you $1,000,000 a year in profit, right? And some yokel walks up and goes, 'Hey Sam, I'll give you $50,000 for that farm.' You just go, 'Go away! No, I'm not gonna sell.' Then, someone else one day comes along and says, 'Hey, I'll give you $20,000,000.' Maybe you consider that. But the idea is that at the end of the day, these yokels will yell numbers at you, and you don't have to sell. Right? Unless you sell, that's when it matters. If you sold for $50 because you're panicked, thinking, 'Oh, the economy is in a recession. Maybe my farm will crumble,' and you sell for $50, yeah, that sucks. But if you ignore the yokels, it's irrelevant. In the same vein, we all own houses. The values of houses fluctuate constantly, but we don't feel that, right? Because you don't see a ticker. Or if you own the hustle, there were times when if the hustle had been publicly traded, it would have been worth next to nothing. Then there were other times when it would be worth crazy numbers. At the end of the day, you know your business. You know what it's worth.

Shaan Puri

Yeah, Dharmesh said this thing: "Valuation oscillates around value." I just had this image. Imagine you're creating value in this business. The line is going up; it's pretty steady. It's quite hard, actually, to have dramatic jumps in the value of your business or dramatic downs and then dramatic highs again. That's not really how value is created in most businesses. He said that value is just like a crazy, moody line that's swinging up and down, higher and lower than the value at any given time. You have to be able to differentiate between the value of a business and the valuation of a business. That's, I think, what you're talking about totally.

Sam Parr

wanna talk about some of these what do you wanna go to now sean

Shaan Puri

Well, I was going to say I have the opposite strategy as Andrew, as I often tend to do with most of my friends. I have the opposite strategy, not by design. I wish that was not true. But, like, for example, right now I'm putting more attention and energy into doing more deals in venture than I did in the past year, or the past two years really, because...

Sam Parr

your personal money

Shaan Puri

Well, though the fund money... I'm, you know, I'm the steward of that capital, right? The returns of that... I have personal money in there as well. But like, the returns of that I think are going to be pretty meaningful personally. But this amazing thing has happened. All the founders have just read bad news for like six months straight. This has done two things. **First**, a bunch of people who would have quit later, quit now, which is fantastic because picking is really hard in startups. So, you know, thanks for making it easy. Where you meet a founder who's just sort of like, "Yeah, so what? Who cares about what's going on in the world? I'm still going to do this thing. I was obsessed with it before. Just because there's a war in Ukraine, a pandemic, and the stock market's down, and crypto is down, doesn't change my interest in this niche thing." So you see that person, and you're like, "Okay, great. They're in it for the long haul." You see other people who are pivoting like crazy, and you're like, "Okay, they're not really in it for the long haul." **The second thing** is that they've cut all their valuations by like 40 to 60% or more. The same deal... yeah, or more. So the same deal you could get for $10 million, you're now getting for $4 or $5 million. Right? $20 million, you're now getting for $10 million. But the reality is that that same business was going to exit 7 to 10 years from now. The market... they're reacting, they're changing their valuation based on today's data. But you're going to get paid out. So you get to buy cheaper, but you get to sell 7 to 10 years from now when the market conditions are going to be dramatically different than today, and likely a lot better than whatever this next down cycle of the market looks like over this year, next year, or however long it is.

Andrew Wilkinson

My worry... my worry is **anchor bias**. Right? So, I mean, if you think about it, everyone was saying venture valuations were crazy in 2019. Let's say the average seed, or sorry, angel valuation was, say, $5,000,000 in 2019, which was much higher than it was in 2016. In 2016, I would see deals for $1,000,000 to $3,000,000. Then it goes to $5,000,000, and in 2020 and 2021, let's say it goes to $20,000,000. Then it comes back down to $5,000,000, and we all go, "Oh wow, it's a crazy deal." So, my worry is that these businesses should actually be valued at $1,000,000 to $3,000,000. Because if anyone came to me with most of these businesses, you know, as a cash flow real-world investor, it just looks insane.

Sam Parr

yeah but you said that

Andrew Wilkinson

to get your money back is to have a massive exit right

Sam Parr

but that's always been true

Shaan Puri

For venture, a venture deal will look horrible to any private equity type of buyer. In the same way, a private equity deal to a venture capitalist will also look horrible. This is because their criteria, lens, and model are based on fundamentally different factors.

Sam Parr

and andrew on this pod you

Sam Parr

said both

Sam Parr

You said, "I didn't invest in Slack when I had the opportunity. I didn't invest in this or that," and you've made, I don't know, dozens or maybe even 100 investments. So, you walked the walk as well. But you said, "Oh, I wish I could have done this. I wish I would have done that. I made a huge mistake." An exercise that I try to do all the time is to ask myself, "What... like, you know, we constantly say, 'Oh, I wish I would have known that this company was gonna be as big as it was,' and I wish I would have pounced on that when I had the opportunity." I always ask myself, "What is happening this second, this week, this month, where I'm gonna look back and think, 'I really just screwed that up?'" For example, for me, it was when I was running the Hustle Facebook ads. I could buy users for a dollar, and they were worth $10 to me. So, I knew at the present that this was a good deal, and I didn't go harder on that. I missed that opportunity. Right now, I am wondering... about eight months ago, Sean and I were like, "Dude, we're never gonna make money on angel investing because the valuations are $20,000,000 when a company should be $5,000,000." This whole idea of Tim Ferriss investing $15,000 in Uber and making $50,000,000 can never happen with us. The numbers just don't work. Now, I'm seeing these numbers, and I'm like, "Is that happening right now? Does this opportunity exist this second?"

Andrew Wilkinson

I would say you guys have a very unique opportunity because of your profile now, right? I think like Tim Ferriss was able to get into the best deals because people wanted him in them. You guys are going to have that same opportunity. But I guess the question is: are you playing roulette or are you playing poker? I play poker, right? I want to play with very good odds in my favor, and I want to know the odds. I don't want to play roulette where it's almost totally random. I still think venture is totally random. I do it for fun, off the side of my desk. Don't get me wrong, when I look back, I go, "I could have predicted, maybe not Slack, but certainly there's some of the businesses where I could see it was quite obvious that they were going to be winners." I could have pushed harder to invest in them, but I still look at that as kind of random because I've had that feeling on businesses where I've lost everything. So for me, what I'm saying is you're about to enter an environment where anyone with cash, who has a large sum of cash, is going to be able to buy a business at, say, a 20% or a 30% earnings yield. This means you can buy a business and pay yourself back in 2 or 3 years, maybe 5 years, and you can buy good businesses. Right now, everyone's going to be panicking and wanting to sell. There are going to be great opportunities. To me, I'd just rather play that poker game than venture right now, and I'm focused on it. It's not to say I'm not going to do venture long term. If a friend of mine, who's amazing, comes to me and says, "Hey, I need $100,000 for my company," I will invest all day. Still, I'm just saying I'm not focusing any energy there right now.

Sam Parr

What's an example of a company that you tried to buy recently and they wouldn't sell? Or an example of a company that you can reveal now and it's no big deal because it just won't happen? Are there any companies that are good examples of this?

Andrew Wilkinson

Well, there's one really weird one: BridgeBase.com. I started playing bridge about 5 years ago, and it's kind of like Chess.com. There are always nerds that play. The website isn't particularly good, but I was quite impressed by all the numbers behind it. I think it ended up selling to someone else. We looked at Chess.com, which obviously blew up with everything that happened with "The Queen's Gambit." I mean, there are all sorts of businesses. I won't kiss and tell because we still might look at some of them, but we've explored a lot of off-the-beaten-path, interesting businesses like that. You find a nerdy cohort of people that have a dedicated place where they all gather.

Sam Parr

how much do you think bridgebase.com sold for I'm looking at it now it looks like it has like

Andrew Wilkinson

I don't know

Sam Parr

8,000,000 monthly unique visitors it's it's pretty huge

Shaan Puri

Yeah, I think my mom uses this, by the way. That little "kiss and tell" line. I have this sheet on my phone where I just save little throwaway lines that I call "get out of jail free" phrases. It's basically like, how do you use a phrase in certain specific situations? I'll give you another example. So, Andrew just did one where it's like, you get kind of put on the spot and you don't really want to share. So, you have a phrase that gets you out of it smoothly, safely, securely, and like no damage done. Versus, you know, there were many other things that he could have said in response that just would have been sort of awkward. Another one, my uncle told me this once. He was trying to do this deal and it wasn't really working. We all kind of felt like, "I feel like this deal is doable, but we're just not there yet." Maybe we just need to like, know if you just "wine and dine" this guy a little bit, I think it would happen. But you can't just tell somebody, "I'd like to, you know, wine and dine you." That doesn't really work. He's just like, "You know, my mentor told me you gotta meet someone belly to belly if you're really ever gonna do a deal with them." Whether it happens or not, you never regret meeting another man belly to belly. The guy laughs and says, "Okay, yeah, sure." He used that to get what he wanted, which is, "I'd like to meet you in person in a kind of informal way, and I have no agenda." I can't come up with a new agenda to do it. I'm just telling you that this is something I believe fundamentally: that two people need to be belly to belly if they ever want to do it. Do you have an...

Sam Parr

I have an entire folder dedicated to these phrases. What other folders do you have, and what other words are in that folder?

Shaan Puri

like you use one all the time like don't don't piss on my leg and tell me it's raining

Andrew Wilkinson

you

Shaan Puri

Know, like, it's like, how do I get my message across, you know, with a little bit of humor, a little bit of showmanship, and a little bit of ambiguity versus just speaking so directly? Because I have this problem: I'm really direct. So, I kind of needed these tools in order to do stuff. I actually stole this from Neville. In his copywriting course, when I was creating my own copywriting course, I had taken other people's courses to see what they knew that I didn't know. What are some useful things they've taught? One of the things he teaches in there is what he calls "slippery transitions." Basically, we all know that you should kind of start with small talk and then get to the meat. If you just go straight to the meat, it's a little bit aggressive and upfront. But also, it's hard to be like, you know, "small talk, small talk, small talk." So, anyhoo, do you want to do that? You know, like, would you like to buy my product? It's like, oh damn, that's awkward. He has this long list of his little connector phrases, and I was like, "Oh, that's really useful." Actually, this is a useful thing to get out of a course. So, when I created my course, I started creating these banks of phrases, headline formulas, transition words, and different things. I'm like, "This is your go-to when you need to sign off or say hello in a fun way, sign off in a fun way, give a transition, or give somebody something that's direct." So, I just started creating those for myself.

Sam Parr

dude belly to belly is a good one

Shaan Puri

Yeah, it's a good one, right? Like, face to face doesn't have the same touch. Belly to belly gets a chuckle, and you're like, "Okay, I understand what you're trying to do."

Sam Parr

Andrew, are you doing any writing at the moment? You've always been a great writer, but it doesn't seem like you're really producing a lot. Are you writing for your companies or anything?

Andrew Wilkinson

yeah I'm working on a a book actually

Sam Parr

what really on what

Andrew Wilkinson

Yeah, just about the story of building our business and the experience that I've had over the last 15 years.

Sam Parr

what's it gonna be called

Andrew Wilkinson

I don't know yet I'm still figuring it out I just signed like a book agent and

Shaan Puri

I think I I think I sold it but yeah we'll see

Andrew Wilkinson

It's fun! I mean, it's fun. It goes back to, like, I think I've spent so many years frantically writing Twitter threads that disappear into the ether. I love the idea of actually building a narrative story and writing something more substantial. I'm really enjoying that process. It's just a new thing, right? It's a totally new thing to learn. I'll share some stuff with you guys.

Shaan Puri

I'll tell you a little book story that will give you some context. So, when you tweeted out that you were coming on, you asked, "Oh, what should we talk about?" There were a bunch of questions, a lot of good ones honestly, but one that stood out to me was this guy who asked, "Can you guys each tell us an example of a butterfly effect moment in your life?" This means a chance encounter you had with somebody or something that nudged you in a different trajectory. It kind of changed your thinking. At the time, it didn't seem like this monumental decision or event; it just seemed like this harmless chance encounter. Your book thing reminded me of my answer to that, which is that once upon a time—I've told this story before—my dad was supposed to come to this meeting in San Diego. He said, "Oh, you should come with me." I was a college kid at the time, I think a junior or senior in college. He said, "Come with me," and I was like, "Okay, I guess I'll just tag along. I'll shadow you for this." I had never done that before, so it was kind of a random thing that my dad tried to do. Then, my dad's flight gets canceled. He was coming from Indonesia at the time, so his flight gets canceled. I'm like, "Oh shoot, I'm already at my connecting stop," wherever that was, Kansas City. I'm thinking, "What should I do?" He's like, "Oh, just go do the meeting." I'm like, "I don't even know the context..."

Sam Parr

like I

Shaan Puri

don't even know what you do for a living how am I gonna talk to this guy he's like don't worry this guy's great and I told him you'll be there and he he just said come hang out with me so I go to san diego I meet this guy and the guy comes in as like a ball of energy and he's got neil centuria he comes in as this ball of energy charisma he's immediately cracking jokes he's telling me a story he walks in and he's late like 25 minutes late I'm just sitting in this room and he goes he goes man I'm sorry I just got off the phone with whoever comcast he's like let me tell you one thing you got a pen get out your pen write this down and I'm like I just met this guy he haven't even said hello yet he doesn't even know my name and I like go get my pen because like I'm the little bitch that I am and he's like he's like write this down if you have great customer service you can run the world you hear me run the world and I was like and so he's like this character and it turns out this guy had this crazy career where he he built like a skyscraper in san diego because he's like oh real estate's where I'm gonna make my money then he's like he got into hollywood he wrote 2 like you know like scripts for films or something like that he was a showrunner for for for a bit and so he thought that's how he would make it then he started tech companies with the internet boom and then he married the woman who started 1 800 flowers and he's like he just had this crazy career he invested he bumped into a guy in an elevator invested in his company and it ended up becoming like chegg or something like that like this big multibillion dollar thing so he had this crazy like he's just wowing me with this like this like afternoon basically he takes me to this restaurant to go eat they have a special table for him and the table cloth is all made out of paper it's a high end restaurant but his was made out of paper like a kid's table and they had crayons and he would just draw diagrams and like cut deals at this table and he didn't he never had to order they would just bring out loads of food and then he'd walk away at the end like an uber he never had to pay and I was like I don't know who this guy is but like that's what I wanna be in life like I wanna be this ball of energy who's just cutting deals drawn on tables and like you know has had 5 different arcs of his career in these different spaces and he's still like I don't know this guy's like 65 70 years old he still seems to have all the energy in the world so and then I just like went back to school and like but if I hadn't had that I don't think I would have had this blueprint that like being an entrepreneur could be cool and it could have like more variety and I didn't have to like choose one thing I like I just saw this one example for one day and it was like a dream basically then it was done I never talked to somebody else he's still there he's still in san diego and he's like guest teaches at some school there and he's got this mega mansion on the top of the hill and that's still what he does

Sam Parr

dude that's awesome I love

Andrew Wilkinson

that was

Sam Parr

a good story

Shaan Puri

But, oh sorry, the book part. On the way out, he's like, "So, I'm with this guy for two and a half hours, and then I'm just like, whoa! I don't know what the hell I just saw. I'm 21 years old. I've never... I've never, like, in college, you don't meet people like this. I didn't, at least. So it was the first time I ever met somebody dynamic like this. Somebody who had made their own path and didn't just follow their major into some career. On the way out, he just shoves a book in my hand. It's his book, and it's called *I'm There for Your Baby*. If you want to read this guy's book, it never sold a lot of copies, I don't think. But he wrote a note to me in it and handed me this book. Then, on my plane ride out of there, I sure enough read the book cover to cover. By the time I was done with the book, I loved the guy. I always remember that because I was like, "Oh, I've always thought of books in one way, as this, like, I don't know, mass market, you're trying to become a bestseller or something like that." Then I realized a book is just a tool that anybody can use. Some people use their book to get public speaking gigs, but this guy used it for a different thing. He could turn a "like" into a "love" just by handing this book. It's like, "Cool, I met you for two hours or an hour. I'm not going to talk to you anymore, but this book will sell you on me and what I'm all about through entertaining stories and whatever." I just remember thinking, "Oh, that's a great idea to do so that every person you meet for the rest of your life you can convert them into being a believer, a buyer, and a fan of what you do." That's actually how I want to use my book when I write a book. I can't find this client info.

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Andrew Wilkinson

I did this personal values exercise about six months ago, and when I thought about what I actually want and what I actually like, I realized that I do business because I want to meet interesting people. One of the great things about being on Twitter or coming on this podcast is that I'll randomly bump into people in a coffee shop. I'll be sitting there, and some guy will walk up and say, "Hey, I heard you on My First Million. I want to tell you about my business." I end up making all these new friends. I've probably made about 20 new friends from this podcast. I've had random lunches with people. Literally, I've been in line for lunch, and someone has said, "Hey, want to have lunch?" And I have! So the next level of that is, yeah, like a book. You get to exist. That's a great question, Rain.

Shaan Puri

when you're in line for lunch like you can't say no

Andrew Wilkinson

well yeah because you're in line

Shaan Puri

I know you want it truth

Sam Parr

totally but it

Andrew Wilkinson

Was great! The guy was super interesting. He had an airplane leasing business; it was crazy. But I think a book allows you to exist in someone's brain for like 20 to 25 hours, and it's exactly that, right? You can actually get someone to truly understand who you are. Then, when you meet them, you don't have to do your preamble. You don't have to do your pitch. You don't have to do what that guy did with you. You don't have to sell; you can just be yourself, and they already know the deal. I think there's something really cool about that.

Sam Parr

So, speaking of meeting interesting people, let me ask you guys if you would do this. I was talking to Nathan Barry the other day. Nathan Barry, you know, he owns ConvertKit or most of it. He's probably worth $200 to $300 million; he's worth a lot. He told me how when he travels, sometimes he'll organize... like if he wants to go somewhere for 7 days, he'll plan an 8th day that's dedicated to work. What he'll do is a 6-hour meeting where he'll let like 20 or 30 people all come and hang out with him, but he charges them. It's almost like a very miniature conference. I could be butchering a little bit about what he does, but basically, he got the inspiration because Basecamp, Jason Fried and those guys, used to do these things where they would charge $200 to $2,000, and you could come hang out at their office. He thought, "You know, I should do this when I travel. It will pay for my trip, and also I can meet interesting people." I thought about this, and the cons are it could feel sleazy and weird to charge money for my time. But I think he actually said, "Andrew, he went to one of your things, and you gave the money away." I think like he... yeah. And I was like, "Yeah, that is the sleazy part, but it is kind of a cool way to meet people that cross a certain threshold." If it could pay for your trip, even though it's like, "Well, I have enough money that I could pay for my trip," there's something about it that I find so intoxicating to do this. Have you ever thought about doing it, Sean? Would you do this, Sean and Andrew? What... yeah, what were you going to say?

Andrew Wilkinson

I I was gonna say I really struggle with this so like you guys are I think one of you guys is on intro

Sam Parr

I'm on intro because

Sam Parr

I listen I'm friends with the founder

Shaan Puri

on intro

Sam Parr

Listen, listen. First of all, I don't even have any... I don't even think I have, well, I don't have that many dates available. But my friend started it.

Sam Parr

and he's like hey use this I was like fine I started using it then he

Sam Parr

Puts my ad everywhere on Facebook, and so I only make like an hour or...

Sam Parr

2 available a month and it's just crazy

Shaan Puri

My Facebook page service lets you meet Sam Parr. I'm pretty sure that's what Intro is based on the ads that I've seen. That's what Intro is.

Sam Parr

my god they are killing me with all these ads

Andrew Wilkinson

Well, it's a terrible way to use your time, right? Like, what we did was a charity "Ask Me Anything." We said, "Okay, anyone who pays, whatever you donate, we'll double it." I think we suggested the donation or whatever, but with Nathan and about 20 other entrepreneurs, we did a Zoom call and spent 2 or 3 hours answering all their questions. I think we raised like $50 for a charity, which was pretty cool. But I really struggle with this kind of stuff because, at the end of the day, you're selling your hours, and I don't want to be in that business. It's fun, though; it's a fun way to do it. But I feel like it compromises the experience. People expect value, right? So if you're on day 8 of your trip and you're exhausted, you now have to dial it up. Like that guy you met in San Diego, you have to be histrionic. You have to wear a mask and pump yourself up. One of the things I've realized is that I'm very capable of doing that. I can be miserable and still pump myself up, like Tony Robbins style—jumping on the trampoline and all that crap. But it makes me miserable, and so I just don't want to do that.

Sam Parr

would you do it sean

Shaan Puri

I would not charge for that, mostly because if I'm doing it, it's because I want to meet interesting people. So I'd rather say it's filtered, or I have the right to just stop talking to you or boot you out in like the next 5 minutes. I can make these meetings 10 minutes, right? So, Brad Feld did this. Brad Feld is a VC in Boulder; he's probably one of the most well-known venture capitalists in Boulder, Colorado. He used to have this one day on his calendar every month called the "Random Random Day" or something like that. He would just let you book a 15 or 20-minute meeting with him. He'd sit in a coffee shop for 4 or 5 hours and try to meet as many people as he could. He had no filter there. He was like, "You don't need a warm intro; you don't need this; you don't need that." At first, that was great branding for him. I was like, "I'm a man of the people." You know, it's like when Gary Vee does these TikToks, and it's just someone who comes up to him looking haggard, saying, "Gary, can I just get a minute of your time?" He's like, "Of course! Anything for my fans." Then the person asks, "Gary, how do I... I don't have enough money for dinner?" And Gary responds, "Here's what you're gonna do: take that guy's dinner and sell it. Now you got 2 dinners. Give him back one, and you got one for yourself." He gives him this pump-up advice, and the guy's like, "Thank you so much!" They hug and embrace, and I'm like, "Wow, I don't want to touch anyone who listens to the podcast." You know, this is like... I just have a rule: we're not touching. Touching is not happening; that's just not a thing. But he does it, and it gives a brand vibe of like, "Gary's one of the people; he's a man of the fans." Similarly, Brad would do this, and I thought there was immense brand value for him in doing this. Then the second thing was, when I met him, I was like, "Why do you do these?" Because I went to one, and he goes, "You have to create a landing spot for luck." Other people call this a "surface area for serendipity," but you want to give in your schedule some place...

Sam Parr

First of all, both of those phrases—"a landing area for luck" and "surface area for serendipity"—are beautiful. Sorry, go ahead.

Shaan Puri

Yeah, future book titles. So, basically, you want to intentionally create space. The more successful you get, the busier you typically will get by default, and the less space goes on your calendar. Buffett and others, like Andrew, you do this too, where you just carve out space. "I'm going to think. I'm going to read. I'm going to walk." I don't need to have meetings after meetings after meetings because guess what? If I let that happen, that's exactly what's going to happen to my calendar. What this guy did, I thought was interesting. He said, "If I just stay in my bubble and only admit people who, on the surface, are worthy of my time or whatever, then I'm just going to miss out on a whole bunch of other things." So, how do I carve out, you know, what's the 1% or 2% of my time that I'm willing to allocate towards randomness, luck, and serendipity? Just so...

Andrew Wilkinson

I can have that in my mix. It's amazing how that goes away. I remember when people would email me early in my career. I would be so flattered; they'd write me like four paragraphs. I'd write them a really thoughtful response and get on the phone with them. Then, you know, you just get more and more of those, and you waste your time. They're only interesting maybe one out of five times. The rest of the time, you want to off yourself. So, I basically stopped. Then it was like, "Oh shit, how do I get that serendipity?" To be honest, going on here is a great form of serendipity because of those random meetings and introductions and stuff. But most of the time, if someone emails me, I honestly delete it unless it's like one line and super clear. If it's a pitch or anything, I just delete it.

Shaan Puri

I found my most **naval** thing, my original naval quote, where I realized that the purpose of this podcast is not to be well-known. Creating content is not about being known by a lot of people, but rather to be known well. What's happening now is that in my inbox or my DMs, people are sending me stuff that is so interesting to me, or they're making intros that are so on point. The reason they can do that is because if they listen to the podcast, they know exactly the type of things I'm into and that Sam's into. We get this amazing inflow of just dope stuff that we didn't have the eyes and ears out there to see. That's when you know it's working. For anyone out there who wants to create content, don't make your goal to be well-known. Make it to be known well. You'll know it's working because you'll start getting more than you're being asked for in these emails or DMs. And Andrew, I'm sure you get the same, which is that people send you either interesting companies or deals, or they want to come work for you. They want to help you solve specific problems because they know you well. They know what you're interested in and what you're looking for more of.

Sam Parr

Dude, I had a guy just recently send me a message. He goes, "Hey, my website does this much revenue and this much profit," and he told me all about it. I didn't reply, and he goes, "What, you don't believe me?" Then he sent me a Google Drive link with his tax returns.

Sam Parr

His social and everything was 100% his tax return. I mean, I guess it could have been photoshopped, but then his reply was like, "See, told you."

Shaan Puri

that's that's no small boy stuff that is that is absolutely no small boy stuff

Sam Parr

The tax returns showed an income of $17,000,000. He sent me multiple years of them.

Sam Parr

and it was hilarious it was one of the best things and I was like you know instead of like

Sam Parr

Casey Neistat and Dave Portnoy used to do these awesome videos where they would unbox all the fan mail that they got. It was actually really fun content. I'm like, we need to have an unboxing of our inbox.

Shaan Puri

No, no. We should unbox your tax returns. People just send us their tax returns, and we open them up and react. We created a YouTube reaction channel just for your income and your business, to your P&L (Profit and Loss).

Andrew Wilkinson

does that guy wanna does does he wanna sell or get you to invest or what was it

Shaan Puri

he wants to be friends

Sam Parr

yeah he just wanted to be friends he just wanted to be friends

Shaan Puri

You know, Joe Rogan has this famous YouTube clip where he reads a quote from someone famous. It's something like, "Most men lead lives of quiet despair," or something along those lines. He's like, "It's so true." Most people walking around just have this sadness in them. There's a version of that for rich people, which is that if you are rich but unacknowledged, there's something in you that just kills you. I mean, we get this a lot for the podcast.

Sam Parr

there's so much

Shaan Puri

Where people are just like, "Hey, I just need to..." It's like you go park at a mall or whatever, and you're like, "Can you validate my parking?" That's how I feel. It's like, "Can you validate my wealth? Can you validate my career?" It's like, "Yep, here, let me give you the punch hole." Like, this is amazing. You are way wealthier than me, you're way more successful than me, and you're probably smarter than me. But they don't have the platform or the audience where they get that sort of congratulatory thing. Maybe the people in their life, they can't brag to. They can't tell their employees how well they're doing. You know, there's no need to go do a press tour about it. So it's like, "Yo, that would be uncomfortable." But then they're just sort of like, "Damn, nobody... I won the game and nobody knows."

Sam Parr

Dude, there have been so many people, Sean, who we've mentioned, and they've reached out to me. I noticed that just that mention makes them view themselves as a public figure. They start creating content and things like that.

Sam Parr

and I wanna tell them like hey just so you know you've already won

Shaan Puri

And you're killing me! They start doing it, and everybody's asking me about my skincare routine. It's like, oh, you know, they get that little taste of fame, that hit of likes, and they're like, "I guess I should abandon this working formula that's generating mounds of wealth in order to write some threads, baby!" And they start rolling. What's that?

Andrew Wilkinson

What's that quote? It's like, "Would you rather be the world's greatest lover and have nobody know, or be the world's worst lover but have everyone think you're the world's greatest lover?" Right? There's so many of these world's greatest lovers walking around.

Sam Parr

Dude, speaking of being a lover, Andrew, you have like a little bit of a 5 o'clock shadow right now. Your jaw's looking chiseled. You look... this is the best I've ever seen you look.

Shaan Puri

true what's going on have you been yes some work done what's going

Andrew Wilkinson

On here, yeah. Extensive facial reconstruction? No, I've just been powerlifting for the last 6 or 8 months.

Sam Parr

it's working that's awesome look at this she's like

Shaan Puri

Coming through Riverside to Sam right now. Anyone who power lifts just automatically turns Sam on.

Sam Parr

yeah you had me on squad

Andrew Wilkinson

I'm not at the Sam Parr shirtless photos on Instagram level, but I'm getting there.

Shaan Puri

Okay, so that's another example. Let's say when you get there, you're just so proud of yourself, but now nobody knows. Everyone still thinks you're just a normal-looking dude, but now you know the truth. Are you going to get your parking validated? Are you going to post something? But maybe, like, you know, you gotta do the fake humble thing where it's like, "You know, I gotta be honest, I'm so..."

Andrew Wilkinson

proud of myself I was

Shaan Puri

Really depressed about my body, and nobody talks about this. So that's why I'm coming forward with these selfies. I just needed to be vulnerable here, guys. Check this out.

Andrew Wilkinson

who's the who's the guy he was on silicon valley the indian guy and he got jacked what's his name

Shaan Puri

kumail nanjani

Andrew Wilkinson

The comedian... yeah, like think about that experience for him, right? Because he had the biggest version of that. Yeah, I don't know. I've done that. I personally have progress photos and stuff, and I showed my friends, but I would never... I don't think I would ever post.

Sam Parr

I've seen them

Andrew Wilkinson

online I can't do it I think they look great

Sam Parr

I've seen them

Shaan Puri

Are you more or less ripped than Chamath? I think he's an investor in your thing, right? Do you guys exchange... you know? Yeah.

Andrew Wilkinson

I definitely am less definitely less ripped than chamath

Sam Parr

no no no no no I don't think so

Sam Parr

you guys were you guys are you guys are are right around the

Sam Parr

Same area, Tisha's dark. So, you know, darker always looks more cut, you know what I'm saying?

Andrew Wilkinson

Yeah, my problem is I've got a hardcore farmer's tan. So my arms get dark, and then my entire body is basically translucent. You can see my heart beating through my chest. So it's not the best for a six-pack.

Shaan Puri

That's amazing! Yeah, you're like, "What white privilege?" Have you ever seen a man's heartbeat? Alright, let's do some more. I wanted to say one thing real quick. You had said something that I thought was... I want to say this because this is one of the most interesting observations I had about my own investing misses that I made a firm note to change. So, you talked about creating businesses off your P&L. You look at your expenses and you say, "Oh, we spend money on SaaS fees. What if we could create a business?" By the way, is the new one called Buyer or is it called something else now?

Andrew Wilkinson

No, we actually started one called **DealMaker**. Because Bayer did software, we sold it to Ramp. They're doing that, so we have to do something different. Right, so basically the story there was Chris and I were maniacal about negotiation in the early days. When you're the owner of a business, say you save $30, that's $30 in your pocket directly. What we noticed was as we got bigger and bigger, we had managers and CEOs running the businesses. They're compensated based on hitting a very large number. So, you know, $30 or $30 doesn't really matter anymore. But to us, the owners, that really matters. So we were like, "Okay, how can we make this easy for the CEO?" Because nobody likes the discomfort of negotiation.

Sam Parr

I hate it

Andrew Wilkinson

And so the idea... it's very uncomfortable. I don't like it either, right? I know all the tricks; I've done it, but I just don't enjoy doing it. However, if I can outsource it to some scrappy person who loves to negotiate a car, a house, a lease, or whatever it is, I'll do that all day long. So we created this business called **Dealmaker** (dealmaker.co). Instead of doing software, we're handling things like office leases, furniture, insurance, and all the random stuff in your P&L. Basically, you just CC them, and they take a cut of whatever the savings are. This is something I wanted myself because I realized, "Oh my god!" When you're rich, or when people know you're rich, they will rip you off if they can. A recent example is when I got Wi-Fi installed in my house. They had to wire the house and do some stuff, and it cost tens of thousands of dollars. I was like, "Holy shit! It's too late now." I could have just had an Eero installed in a mesh network or whatever, but instead, I went for the rich, fancy option and got it all custom wired. Another example is in our office. We got drapes, and the quote was $20,000 for some white drapes. I looked at IKEA, and we could buy them for like $2,000. I'm just realizing that we have a target on our back. I think anyone who runs a business does, especially when times are good. So I think having someone to negotiate on your behalf is a very good idea.

Sam Parr

how did you how much did you fund this business with it looks cool the site looks good

Andrew Wilkinson

Yeah, I think it may be like $50,000. Like I said, we don't put large sums of money into this stuff. We basically find really scrappy operators where we can say, "Look, we've got all the back office, all the structuring, legal, it's ready to go. We'll build the website for you; you just need to take it and run with it." We typically go for a 50/50 or 70/30 split, depending on the amount of capital we have.

Sam Parr

is it working

Andrew Wilkinson

yeah so far I mean I think it's profitable at this.

Shaan Puri

You said

Andrew Wilkinson

it's pretty you said you just need much to be profitable

Shaan Puri

**C deal maker.** So, you're like, when you're talking to your vendors or whatever, and you just see... **C deal maker, deal maker in.** It's like basically like, "Hey, you know, here's my brother who's gonna beat you up." It's like, think...

Andrew Wilkinson

Of it as like a procurement department, right? So, like if you go to Walmart—like we used to work with Walmart at Metalab—it would be like, "Okay, here's what we want." We'd say, "This is the number," and then they send you to procurement. Procurement is a guy who's literally a professional negotiator who crushes you. They crush you in so many different ways, right? It's like your hourly rate is too high, your payment terms—you know, you said 15 days, we want 45. So, it's just about getting the most.

Sam Parr

out of your head

Sam Parr

in my head

Sam Parr

I'm just imagining a bunch of young guys, shaking in their boots, thinking, "Oh, we gotta meet Mister Brickyard." And he's this scary guy, but when he walks in, he's just this dork with a horrible half-beard and mustard on his white short-sleeve button-up shirt. He looks like Dwight. He's just the nerdiest guy ever, and he starts rubbing his nipples, thinking about a good deal... like, what?

Shaan Puri

oh yeah

Sam Parr

you guys take 10% off

Andrew Wilkinson

there's a great there's

Shaan Puri

a great book called I

Andrew Wilkinson

"Will Teach You to Be Rich" by Ramit Sethi. I read it like 15 years ago, and he makes a really good point. He goes, "Look, you're not going to get rich by paying attention to things like lattes, building budgets, or not buying lunch out. You get rich by paying attention to these macro big things in your life." For example, when you buy a house, there's a massive difference between getting a 3% interest rate and a 2% interest rate. But no one thinks like that. This is the stuff you want to outsource to someone else and have them do it. You know, you buy your car, you buy your house, you get an...

Sam Parr

office lease you

Andrew Wilkinson

buy $20,000 of furniture

Sam Parr

how are

Sam Parr

You are actually pulling this off! How? What's the work behind the scenes to do this deal?

Andrew Wilkinson

It's literally an army of guys who love to negotiate. We train them up, we give them all the books that we read, and we have a process. They get CC'd and they go for it. They basically say, "Look, your first quote was X, we saved you Y, give us a cut of the savings, and go for it." In some instances, they'll retain us. For example, let's say there's a company that wants to do a super thorough review of everything. Then, they might pay a retainer or something, but usually, it's just being CC'd.

Shaan Puri

My dad should work for you. He is incredible at this, but he's very unorthodox. He can't train this.

Andrew Wilkinson

Well, it takes time. Here's the thing: you and I, like if we go to a car dealership... I remember I walked into a car dealership and I said to the guy, "I have 2 hours. If you can get me the car in 2 hours, I will just sign whatever you want, but I need it in 2 hours." Right? That's the worst possible negotiating tactic, but I value my time and I don't want to sign documents. I have a friend who will literally go to 5 of the same dealerships, get quotes from all of them, name-drop them to one another, walk out 5 times, do like 10 test drives, and show the guy how rich he is in a variety of ways so he knows he's serious. Then finally, he'll save, you know, $10,000. I'm just too lazy, but there are other people for whom it's totally worth it, and the numbers are huge.

Shaan Puri

He picks up the phone. "Oh yeah, Derek, I'll be there shortly. I'm just finishing up here. I don't think I'm getting what I want, so I might go over there." "Oh, you have it ready? Well, that's great! I'm just going to hang out here for 10 more minutes in case something changes." You know, like my dad will be on the phone with some company, but he does it for petty stuff. He'll just try to get like, you know... you know when you...

Sam Parr

it's like dad you can't negotiate with the grocery store

Shaan Puri

Yeah, no, no, literally, he'll call the airline and just be like, "You know, why did you charge me for my seat?" They're like, "Well, that's how planes work." And he's like, "I've been a customer for a long time." Then he'll just pause. Most people will just bail because it's too awkward, but he'll just sit in that situation.

Sam Parr

and he'll just be like and

Shaan Puri

Then they'll be like, "Oh, you know, we've loved having you, sir," and he'll be like, "Long time." Then they're like, "Where are you going with this? This has nothing to do with the conversation about this." He'd be like, "Yeah, yeah, this is just very nasty behavior." And he's like, "What? Woah, nasty behavior? What are you talking about? Nothing is happening. We just did the normal thing here. We just charged you for the product." And he's like, "Yeah, this is just upsetting."

Sam Parr

and then

Shaan Puri

they're like okay well sir we gotta go now

Sam Parr

we we need like a I want a text folder of all these phrases yeah

Shaan Puri

like just he always does that

Andrew Wilkinson

long time

Sam Parr

like like you know

Andrew Wilkinson

trump you

Sam Parr

know trump does this

Shaan Puri

trump will be like you know

Sam Parr

people are saying

Shaan Puri

People are saying, "It's great." They said, "It's great." You know what I mean? People are saying that. They're saying that, and he's just like, keeps going with this statement. That's my dad.

Sam Parr

dude instead of

Andrew Wilkinson

Well, so often, it's just silence. Just being silent, saying, as you said, throwing out one of those open-ended statements, and then just staying silent and holding the discomfort. Then often, they will start to, you know, give on the price or whatever. You just realize that most people will avoid social awkwardness.

Sam Parr

Dude, you need, instead of "deal maker," to have something like "comp maker" or "salary maker." So many people, myself included, knew my salary when I was negotiating my salary for HubSpot. When we sold the company, I remember my wife was in the room, but she was on the other side of the computer screen, so they couldn't see. They're like telling...

Sam Parr

Me a number, and they told me a number. I was like, "Yeah, whatever. You know, whatever's cool." My wife was on the other end, like, "What the fuck? Shut up! Don't shit."

Shaan Puri

saying it's all good during the yeah

Sam Parr

I remember that's actually that's

Andrew Wilkinson

that's actually a really good business idea maybe we should add

Sam Parr

that on

Sam Parr

dude is that

Andrew Wilkinson

Like a coach, where it's like, you know, you don't... because it'd be weird if it was like a third party. "Hey, I'm doing a comp review. This is Jerry from my procurement team."

Sam Parr

well here here's how you could

Andrew Wilkinson

but if you had that guy telling you like do this do this do this

Sam Parr

that would be really interesting

Sam Parr

why it could be cool

Sam Parr

It's because I remember I got a speeding ticket recently during the pandemic in rural Kansas when I was driving cross country. They were doing Zoom hearings, so I thought, "Oh, I'll fight the ticket because I actually think it's nonsense." I had a lawyer—I don't know if I'm breaking any laws here—but I had a friend who is a lawyer. I would say, "Hey, I'm going to put you on speakerphone so you can hear what they're saying," and then just text me what you think I should say in court to fight this ticket and try to get off of it. She was on the phone listening, saying, "Alright, ask them this." I asked them that, and then she said, "Now ask them this." The judge was like, "Wow, you really know what you're talking about."

Sam Parr

I was like oh yeah you know like

Sam Parr

I just... I really didn't think I did anything wrong. You really just need that for, like, when someone's just CC'd on all emails as part of the salary negotiation. Or have them there, like, listening to the Zoom and saying, "Alright, now say this, now say this," and then just give me half of the earnings that you just got... have gone up by.

Shaan Puri

When I was at Twitch, they were like, "Yeah, the salary is this," and I was like, "Oh." I just let them sit in it. They asked, "Sorry, did you say something?" I replied, "No, just lower than I thought." I was just buying time. Then I asked, "Can you explain how the process works?" Instead of saying, "I want more," or "Here's a different number," I inquired, "Can you explain how you guys get to a number like this? Where does this number come from?" They didn't know. Then they said the magic word: "We have these bands." A band is code for a range, which is code for "We're trying to see how much of a sucker you really are." I realized, "Oh, so you're telling me for my role, there is a specific minimum and maximum band of compensation that I could get, and you're offering me anything but the absolute top of the band." I asked, "Hey, better yet, have you ever gone out of band and gone higher? What situations would cause that to occur?" They said, "Well, somebody needs to vouch for it. They have to go to bat; they have to write a memo." I thought, "Cool, alright, now I know what I'm going to go ask for." I basically just worked through the system. Once you realize that these are all negotiable, and that it's like playing a robot that can only make certain moves on the board, you see, "Oh, you can only go forward and backwards? Great! I'm just going to go around you over here." You're bound by these rules of how the process has to work. At most companies, you can get a lot more than you're currently getting.

Sam Parr

What have you guys ever thought about this? My wife works at a big company, and she's been offered jobs at other large companies—10,000, 20,000, even 100,000 person companies. I'm like, "Sarah, what would happen if you just told the interviewer, 'Hey, look, let's screw this place a little. Just tell me the most amount that you can give'?"

Sam Parr

Me and let's work through these. Yeah, like, no, I mean, not really screws, but like, what's stopping you? They're like, "Look."

Sam Parr

I don't give a fuck. It's not my money. I'll... yeah, let's just like... let's rob this place if we can. So let's just like...

Sam Parr

I'm just gonna tell you like why

Shaan Puri

Across the table, yeah, write down a number here that you wouldn't get fired for giving me.

Sam Parr

Why is this like the hundred-thousandth employee who has the power to allocate certain dollars? They don't care, you know? It's not the company's money. I've just always been shocked that the culture is such that they are actually being honest in many cases to the employer. They could be like, "Look, I like you, you like me. Here are the rules. I need you to tell me this, and I can then give you this." You know what I mean? Like, what? Well, they don't have an... I can't believe it.

Shaan Puri

They're not your friend. They don't care. Their incentive is to just do the basement and cover their ass, like most people in big companies. And just... so let's do... can we do one other topic?

Sam Parr

yeah

Shaan Puri

Andrew, pick the one that you had prepped, the one that you're like, "Oh man, we didn't get to that." So pick that one and let's do that.

Andrew Wilkinson

k well let me do one that's applicable we were talking about winter coming and I had a story I wanted to tell so one of the other things you know obviously we're like you know stress testing all the businesses we're dialing in our p and l's we're pulling excess cash in the head office we're you know loading the elephant gun so to say we wanna get ready for a big acquisition and winter and 22 like kind of interesting things we're doing 1 you know this is very obvious if you have debt you know lock in right even at a higher rate I think a lot of people are doing this thing where they're going well it was you know interest rates were at 3% I coulda locked in then now they're at you know 5% I don't wanna lock in and they're kind of anchored to that 3% thing to me it's about certainty I wanna know that when I build a model when I stress test the business that I know that my interest is gonna be at 5% or whatever even if you know they go up or down or whatever I just want that certainty the other kind of weird thing we're doing we've done this once before is we're buying we're buying options on the stock market so this is and this is kind of speculative but I look at it as an insurance policy so here's an example of what we did in 2020 so we started freaking out about covid we're a little bit early on it chris and I locked down kind of like late january or early february and if you remember everyone was kind of saying like oh this might be a bit of a nothing burger up until march 1st or second or third kind of in that zone and so what we ended up doing is we're looking we're doing these stress tests and we're looking across all of our businesses and at the time a lot of our revenue came from our agency businesses and we had these large fortune 500 customers but we were going okay what's the first thing all the fortune 500s do they pay everyone late and so we're looking at okay we're going to get some late payments that's going to cause cash flow issues we might also have some of our startup clients go out of business and they may just not pay us and so we started looking at what is the number there that we want to insure and it was like 5 or $10,000,000 where we were like okay these are all companies that may just not pay us we might you know lose that revenue and and if that's the case we're gonna have a bad year we're not gonna have liquidity and so what we did is we basically said okay in late february we said okay if this if the s and p 500 the index of the 500 largest companies in america goes down by 20% we will get a big payout and so we bought for $500,000 put options that were went out about a year so if any time in the next year the market dropped that much we would get a large payout and the idea is it's kind of like buying an insurance policy on your house right you pay this premium you put the money out and you hope that you just pay that premium and nothing bad happens but if your house burns down they'll give you $5,000,000 to rebuild it and so what ended up happening is we bought these put options they went from being worth $500,000 to $7,000,000 all of a sudden and chris and I are like laughing our asses off never had you know never bought put options never been through this or whatever so they go to $7,000,000 and we're like holy shit this is amazing let's sell them right so we sell them we cash in we take $7,000,000 onto our balance sheet then we look at each other and we go well this could be the worst recession of all time yeah you know are we are we the guys who just sold our insurance policy like should we keep holding this you know what if what if this is 1929 and the stock market's really gonna go down 50% and the whole.

Andrew Wilkinson

Of this is to have this insurance policy and sleep well at night. Now, we don't have it, and so we took all the money except for $500. We took $500 out, we took all the money, and we rebet it. We lost everything because the Fed came in and the markets rebounded. Now, there are two ways to look at that story. One is we got hit with gambler's fallacy. You know, "Let's go in, we'll do one last roll at the roulette table." The way that I think about it is, I lost my premium. I paid for insurance, and the bad thing didn't happen. Therefore, I didn't deserve to get the $7,000,000 payout. The fact that we sold it is just... you know, it sucks that we had that money in our bank account for five days or whatever, but it really is irrelevant. So, the way to think about this: let's say that you own a SaaS business and your entire net worth is in the SaaS business. You currently, you know, you've raised money at 20 times revenue or something. You might want to find a SaaS business that's publicly traded that is a comp to you. You might want to buy out-of-the-money put options or buy a basket of those and basically say, "If the market gets crushed, that's probably an indication that the larger economy got crushed too, or my part of the world got crushed, and businesses like mine are doing badly." So, it's kind of an interesting way to buy an insurance policy. It is certainly a little bit gambley, right? But it is an interesting way to sleep at night.

Sam Parr

you come up with the math of like alright 500 k

Andrew Wilkinson

Well, you can model these out. There's a website called Options Profit Calculator, and you basically say, "This is the stock," and it'll show you a variety of scenarios. For example, in that one I just said, "Okay, in previous recessions..." You know, a recession is defined as... what, you know, more than...

Sam Parr

like 4 quarters

Andrew Wilkinson

15% drawdown over two quarters or whatever. I just said, "Look, if that happens over the next year, I will get a payout." I could look at the different payouts based on where it went.

Sam Parr

are you buying any real estate right now

Andrew Wilkinson

no I hate real estate

Sam Parr

are you sean

Shaan Puri

buying real estate no not at the moment

Andrew Wilkinson

I hate real estate so much that I don't build equity in my own houses. I do interest-only mortgages because I want everything in businesses. A business can earn $1,000,000 in revenue and then the next year do $100,000,000 using creativity. There's no apartment building you can buy that will do $1,000,000 in revenue and then $100,000,000 the next year. It's just not possible.

Sam Parr

how do

Sam Parr

you qualify for an interest only loan you just gotta make a lot of money

Andrew Wilkinson

You know, I think you can do it via most banks. Generally, it might be the sort of thing where you have to have some sort of collateral or other assets, or be at a larger scale.

Shaan Puri

Are you fixed? Yeah, I'm fixed. So then you got locked in at what rate? Like, to the 2% when it was back in 2%?

Andrew Wilkinson

I think I locked in at 5. I'm one of those people where I was like, "You know, hey, let's lock in at 3." I didn't do it, let it go too long, and ended up locking in at 5. But it goes back to, I want to sleep at night. It's possible interest rates go back down to 2%, and I feel like an idiot. But I want to sleep at night. If interest rates go to 8% or 10%, which is, you know, maybe not a high probability but it's certainly possible historically, I don't want to deal with that.

Sam Parr

sean are you buying a house now

Shaan Puri

No, I just rented this place. It's like a 2 or 3 year rental. Yeah, I like renting. I like the place I live.

Sam Parr

me too

Sam Parr

I love it

Sam Parr

because I

Shaan Puri

For multiple reasons, buying a house you own is not a great investment. There's no yield, right? You are the tenant. I think people conflate those two things. If you buy property that pays you, okay, that's an asset. If you buy property you live in and it costs you money, that's a liability in my opinion. So, I think that's the first piece. The second piece is that picking the place you like to live is not always the best investment. What are the odds that the best investment of a pretty significant amount of capital is the place my wife really likes the countertops? This is just not going to be the place. That's not where the value is, trust me.

Andrew Wilkinson

Yeah, you have people that put like 50% or even 90% of their personal net worth into a single investment, which is a house. Then they go, "Oh, it doubled in value over 15 years." And you're going, "Yeah, if you just bought an ETF, you would have had the same result." If you bought an individual stock, you probably could have done way, way better. So to me, it's like if someone's completely... if they're not an investor at all, then sure, go buy a house all day, whatever. It's a reasonably okay investment. But if you're even remotely smart and you know how to read, and you go and read investing books and stuff, I think it's crazy. I mean, I would just rent a house all day and put everything into equities and businesses.

Sam Parr

we're renting it too I I own a

Sam Parr

I wanted to have a house in Austin because I wanted that to be my residence. Whatever we did, I actually rent that house out now when I'm not there. I would much rather, in the future, for like the next 10 years, Sarah and I, even when we have kids, we're renting for sure. I want to go a step further; I want to rent all my furniture too. There's a company called **Feather**. Have you guys heard of Feather? You can rent furniture on that website, but it's only in certain cities. I intend to rent a place, and I'll get a nice place that will cost me $10 to $15 a month. Then, I'll spend another $2,000 to $3,000 a month to rent all my furniture. I want to own nothing.

Shaan Puri

I love that

Sam Parr

it's so much

Shaan Puri

I love that

Sam Parr

It feels so much better not owning stuff. I was on my way back now to Austin, and I was in Brooklyn for four months. I rented a furnished place, and it was sick. It made me so much happier.

Andrew Wilkinson

I'm realizing, over the last couple of years, that I bought a house at a lake locally. I've got a place in Vancouver, and I've got a house here. The management of all these properties requires me to have a staff that manages them. I own them, and I do this interest-only thing, but I am responsible for them. It's just constant: stuff breaking, new furniture, hiring designers, doing renovations—all of this. You realize pretty quickly that everyone thinks they want to have 10 palatial estates all over the world, but it becomes yet another business to manage. It's yet another P&L, yet another group of people to give opportunities to, and you have to have HR around and everything. It's... you know, don't cry any tears for me, but yeah, it's really annoying.

Shaan Puri

Yeah, I think everybody ends up a prisoner of a prison of their own making. So, you know, you want to design that prison. What are you going to be a prisoner to? Is it your stuff? Is it your properties? For example, if I bought a fancy car and lived in San Francisco, I'd just be stressed all the time that it's going to get scratched or broken into. It wouldn't make me less happy and less free. So, it's like, where do I want to optimize for? Is it more freedom and more happiness? I know I need to do some things to make that happen. Maybe exercise is part of the prison I want to design. I know that if I do this all the time, make it a part of my routine, and prioritize it, I won't miss it. I will make time for it, even though it costs me money and requires hard effort. But it has this payoff in how I feel at the end, how much healthier I can be, how much more mobile I can be, etcetera. I think people often think you have to choose what you want or what you want to do. I believe you also have to choose the constraints you're going to put on your body, your time, yourself, and your psyche. You will have some constraints, and whether you choose them or not, that's up to you.

Andrew Wilkinson

Totally! I mean, you look at any of these sayings around, "If it floats or flies or other things, you know, rent it." I think that should be applied to most things, frankly. It's just a matter of can you get the things you want. My issue, for me, is being in Canada in a small city. We don't have furniture rental, and there's not a lot of great high-end rental homes and stuff. But I'd be all over that if I could.

Sam Parr

Well, dude, thank you! This is awesome. I loved seeing you; I love seeing your face again.

Shaan Puri

it's not like being belly to belly I'll tell you that man

Sam Parr

it's not like being belly to belly

Sam Parr

but dude his face your face has become a better face in the last 6 months your face is is

Sam Parr

yeah dude

Andrew Wilkinson

You're looking full, thick, tight, and strong. Thanks, guys! Yeah, yeah. And what's going on? You guys talked about... I know you did Camp MFM or whatever. Are you going to do more of that? I really regret not going to it.

Sam Parr

that you got the invite you blew it bro

Andrew Wilkinson

I know I know I hate basketball

Sam Parr

No one played it, dude. It was like... Sean was the best player there, which, like, we weren't... no one was that amazing.

Shaan Puri

right now

Sam Parr

yeah no ben on the pod was like dunking on people

Sam Parr

nick huber was great sean's really really good but besides that every we were all just like a bunch

Sam Parr

of morons

Shaan Puri

Event at something I suck at, like you know, Sam's Camp MFM is going to be like running the 200-meter sprint. It's like, oh, I just happen to be amazing at this.

Sam Parr

Oh, you know, guys, there's always a track on the street. Oh, look! A squat rack.

Shaan Puri

Andrew, what would be the version of that that you would do? It's like, it's alright. The two staples are: you're trying to have great, interesting people—a curated set of people coming. But the other is, we're not just sitting in a room, you know, looking at a whiteboard or a presentation. It's not a conference. So, it's about doing something that's a passion that we like, and then the networking fills in the gaps in between that, right? The ins and outs, the bus ride there, the food, the whatever. But the focus is on some activity. What would yours be that you're really interested in doing?

Andrew Wilkinson

I don't... I honestly, I'm not a big hobby person. I mean, like most entrepreneurs, I get obsessed with business and stuff. It's been a real challenge for me to find those things. I do these forum groups where I've been in some of these groups for like 10 years. There are 5 or 6 guys, and we go into a room once a month to talk about everything that's going on in our businesses. Who runs that? I used to be in EO (Entrepreneurs' Organization) and then I just started doing it myself. We just did a forum retreat and we went to Whistler. You know, beautiful mountain. We all went hiking. We'd go hiking all day, do cold plunges, and exercise during the day. So there are activities, and there's something about being in a group, specifically with other dudes, where you're sweating, your heart rate is going, and you're talking about what's going on in life. We did this thing where we would have dinners and we had this pack of cards. We would just pull random cards, and they'd have really messed up questions like, "What's a rude word your parents would use to describe you?" or "How have you let someone down in life?" I just love that kind of stuff. For me, it's about how do you create things that facilitate deep, interesting conversations, ideally with people you have something in common with, so there's a shared bond.

Sam Parr

but you know

Andrew Wilkinson

I mean I'd be down pull

Sam Parr

a car at the top of your deck and you're like

Sam Parr

Alright guys, I have a question: should we kiss right now? Oh my god, the deck said it, not me! Possibly... the deck said it.

Andrew Wilkinson

the written in sharpie

Sam Parr

That's the *dead* retreat sentence. That was too easy. Sorry, I'm working on my dad humor. Alright, I gotta go. I'll see... great, yes.

Shaan Puri

alright guys

Andrew Wilkinson

hey guys