Andrew Wilkinson’s $20,000 to $260,000,000 story | My First Million

Intro

In this episode of the “My First Million” podcast, Andrew Wilkinson, founder of Tiny, shares his journey from investing $20,000 to building a $260,000,000 business. He discusses the profit first mentality, the importance of focusing on the not-so-sexy aspects of business, and the power of networking. Wilkinson also shares valuable insights on buying and selling businesses, building a valuable network, and the challenges of change.

Main Takeaways

Profit First Mentality and Business Growth

• Implement a profit first mentality by separating gross profit and using it to pay bills, which forces efficiency and discipline.
• Focus on the less glamorous aspects of business, such as increasing prices and reducing shipping costs, to drive significant profit growth.
• Small changes, like marking up invoices for credit card payments, can make a big difference in profitability.
• Leaving excess cash in the bank can lead to misallocation, so distribute it out and leave only a month or two of working capital.

Building a Valuable Network

• Networking is valuable and can lead to opportunities and connections with influential people.
• Find excuses to connect with interesting people and offer value to build relationships.
• Start small and work your way up to bigger events and connections.
• Be selective and careful about belonging in rooms where you have shared language and value.

Buying and Selling Businesses

• Building a funnel for buying businesses takes time, patience, and a selective approach.
• Qualify potential sellers early on to avoid wasting time.
• Consider sending non-binding letters of intent as a common practice in buying businesses.
• Be cautious and selective when selling a business, as regret can arise after realizing its competitive advantage and potential.

The Challenges of Change

• Change is rare and difficult to achieve, and assuming people will change can lead to bad decisions.
• People have commitment and consistency bias, doubling down on their ideas when challenged.
• Change may only occur after hitting rock bottom, but there are outliers to this rule.
• Lack of awareness can significantly impact business results, and implementing new ideas can be beneficial.

Summary

Profit First Mentality and Business Growth

Andrew Wilkinson emphasizes the profit first mentality, separating gross profit and using it to pay bills. This approach forces efficiency and discipline in business operations. He also highlights the importance of focusing on the less glamorous aspects of business, such as increasing prices and reducing shipping costs, which can lead to significant profit growth. Wilkinson shares practical examples, like marking up invoices for credit card payments, to illustrate how small changes can make a big difference in profitability. Additionally, he advises leaving excess cash in the bank and distributing it out to maintain better discipline.

Building a Valuable Network

Wilkinson is a master networker and shares valuable insights on building a valuable network. He suggests finding excuses to connect with interesting people and offering value to build relationships. Starting small and working your way up to bigger events and connections is a strategy he recommends. However, he also emphasizes the importance of being selective and careful about belonging in rooms where you have shared language and value.

Buying and Selling Businesses

Wilkinson shares his experiences with buying and selling businesses. He advises building a funnel for buying businesses, which takes time, patience, and a selective approach. Qualifying potential sellers early on is crucial to avoid wasting time. Sending non-binding letters of intent is a common practice in buying businesses. When selling a business, it’s important to be cautious and selective, as regret can arise after realizing its competitive advantage and potential.

The Challenges of Change

Wilkinson discusses the challenges of change and highlights the rarity and difficulty of achieving change. He cautions against assuming people will change, as it can lead to bad decisions. People often have commitment and consistency bias, doubling down on their ideas when challenged. While change may only occur after hitting rock bottom for some, there are outliers to this rule. Lack of awareness can significantly impact business results, and implementing new ideas can be both annoying and beneficial for a company’s growth.

Conclusion

Andrew Wilkinson’s journey from investing $20,000 to building a $260,000,000 business provides valuable insights into the profit first mentality, building a valuable network, buying and selling businesses, and the challenges of change. His experiences and advice serve as inspiration for entrepreneurs and business owners looking to grow their ventures and achieve long-term success.