Money Machine Investment Framework

A framework for identifying and scaling profitable business models, focused on finding opportunities that reliably convert investment into greater returns.

Core Investment Philosophy

• Look for businesses that can turn $1 into $2 consistently
• When you find that "machine", pour as much money as possible into it
• Don't spend money just to spend - ensure clear return metrics
• Focus on scalable opportunities that can handle significant investment

Key Investment Criteria

• Sales efficiency metrics
  • Example: If a $150k salesperson generates $500k in sales, hire as many as possible
• Engineering/Product ROI
  • Invest in building products with clear market demand
  • Fund engineering teams when product-market fit is proven

Growth Strategy

• Don't wait for profitability to scale
  • MongoDB raised/lost $1B before first profitable quarter
  • Now makes $300M/year in profits
• Speed matters more than perfect execution
  • Example: DoubleClick expanded to 25 countries before first country was profitable
  • Resulted in dominant market position that persists decades later

Warning Signs

• Not hiring fast enough can indicate:
  • Haven't figured out the model yet
  • Don't believe idea is good enough
• Need to cut back when:
  • Not getting expected returns
  • Market share maxed out
  • Market smaller than anticipated

Funding Approach

• Consider dilution vs growth potential
  • Example: $2M at $20M valuation (10% dilution)
  • Must believe investment will grow company >10% in 18 months
• Don't raise too much too early
  • Expensive capital if company value increases significantly
• Time is never on your side
  • Good ideas will be copied within 6 months
  • Need to move quickly to capture market