Andrew Wilkinson, co-founder of Tiny, walks through the four income levels of his career — from barista to $60/hour freelance designer, to agency owner making $1M+ per year, to selling Pixel Union for $7M and discovering Warren Buffett’s investing model, to taking his company public. Along the way Sam and Shaan share their own early money stories and the conversation turns to the deeper question of whether you actually need to be a billionaire, how to calculate your “enough” number, and why Andrew wrote his book Never Enough.
Speakers: Sam Parr (host), Shaan Puri (host), Andrew Wilkinson (guest, co-founder of Tiny)
Introduction: Andrew Wilkinson at the House [00:00:00]
Shaan: All right, what’s up — we got our friend at the house. Andrew Wilkinson. Andrew, famously, is the co-founder of Tiny. He started off as a barista, ended up creating a design agency that was super successful — designed a bunch of popular Silicon Valley products you may have used — then read about Warren Buffett, read about Charlie Munger, and started buying businesses. Now owns a portfolio of 30-plus companies. Recently took the company public and then stepped down as CEO. Andrew is here on his — I don’t know — vacation tour after stepping down.
Andrew, good to see you, man. Your skin looks great. The glow looks good. You seem happy. You got that non-operator glow.
Sam: Enough about talking about how much of a babe you are. So Andrew, I sent you a voice note. You started off as a barista at a coffee shop, and you’ve done very well in business. I said, “I want to know what were the different jumps — income jumps — that actually made a difference.” And you said there were four levels.
Andrew: Yeah, totally.
Level One: Barista to $60/Hour [00:00:45]
Sam: Well, I think the best money you ever made was jumping from being a barista to making like $60 an hour. So you go from $6.50 an hour to $60 an hour. It sounds like that might have been somewhat happenstance. Was that intentional, or did you just get a lucky bounce?
Andrew: So I was working, making coffees every day for all the people that came in. There were these two guys that would come in every single day — they’d roll in looking like they just got out of bed at 10 in the morning. They were probably about five years older than me, so like 24, 25. They would just come in and sit on their laptops all day, drinking espresso after espresso. One day I asked them, “What do you guys do? Don’t you have jobs?” And they go, “Oh, we’re web designers. We just walk into random businesses, ask them if they have a website, and then we say we’ll make one for $500.”
So that day I was like, forget this. I don’t want to make the espresso, I want to be drinking the espresso. I want to be these guys. So I went and bought a book on web design, and a couple days later I walked into a place and sold the guy a website. Within a couple weeks I’d quit my job.
Sam: Wait, did you know anything about design?
Andrew: Yeah, I did, actually. When I was a teenager I had a tech news website and I knew how to use Dreamweaver — like really basic web design. So it wasn’t rocket science to me. I knew these guys were smart, but they didn’t have any crazy qualifications. It was nothing I couldn’t learn. So I just dove in and got lucky.
Sam: Do you remember who you approached that first time?
Andrew: Yeah, it was a pulled pork barbecue joint. A place called Pig, locally. I think I got like $500 and some free pulled pork sandwiches. I basically got unlimited sandwiches for a while.
Shaan: That’s pretty awesome.
Andrew: I was making a small amount of money for something I hated, and then I started making a large amount of money for something I would have done anyway. It was fun. It was fun designing and coding websites.
Sam and Shaan’s First Money Stories [00:03:30]
Sam: The first money I really ever made outside of a college job was actually winning a business plan pitch competition. We won $25,000 cash, and they made some MBA student from business school work for us for $5K. So we won $30,000 of total comp. Me and my two co-founders lived for one year together on $25,000. It was awesome. We didn’t really know how much money a business takes, and we didn’t know how much money it takes to live because we’d just been in college the whole time. To us, that was like, “Oh, that’ll last us a long time.” We lived off it for one year. But it was the best money at that time — it was a big jump because we didn’t have to get a job. It was freedom.
Shaan: Andrew, the early dollars create a lot more freedom than the later dollars — that’s the way you’re explaining it. Those early dollars matter a lot more than the later dollars, because you only get so much incremental freedom. In fact, you might actually get less freedom if you start buying a bunch of stuff that you then become a slave to.
Sam: My first level was almost the same as yours, Shaan. I think $24,000. I was 23 or maybe 24. I had a small website that I sold, but I still had to work there — it was basically an acqui-hire. But after taxes and everything, I think I had $24,000. At the time I was spending $2,000 a month in living expenses, and I said, “I have a year. I have a year of expenses saved up.” And I felt like — let’s go to Australia, let’s go to Thailand, let’s live. Having $24,000, I felt incredibly wealthy.
Shaan: By the way, that’s a powerful thing to do — change the denomination into time instead of money. If you have $24,000 or $36,000 or $90,000, it’s kind of like Chuck-E-Cheese money. It’s tokens you don’t really understand. What most people do is they just keep working blindly, put it in the bank, and don’t really know how to use it.
A more important question is: how do I get myself a year of freedom, or 18 months of freedom, where I could either just go enjoy myself or go take a shot at creating a new life? Early on, it doesn’t take much to get a year. Both of us basically did it on $25,000, which is surprising to hear even now, because my current burn rate’s a lot higher. But a year of freedom or 18 months of freedom is a good way to denominate things when you don’t have a huge sum.
Sam: I used this app where every time I spent anything, I typed in how much I’d spent. So if I got coffee for $2.50, I wrote $2.50 in there. Then I had a spreadsheet where I took the average of the trailing six months and said, “That is my monthly burn.” Then I calculated: here’s how much money I’ve saved, and I need to get to 12 months.
Level Two: Self-Employed to Boss [00:09:00]
Sam: All right, so you made it to level two. You said you went from self-employed to boss. What does that mean?
Andrew: Over time I discovered there were all these online job boards and companies in San Francisco posting, looking for freelance designers and developers. I was doing these little $500 local websites, and then I found these Silicon Valley startups posting. This was what you’d call today product design or interface design.
So I got this project designing an interface for an ad manager for some startup. I did a really good job, the guy really liked it, and it was like $2,000 for basically no work — maybe five days of work for two grand, which ended up being $2,600 Canadian. Very sweet. The guy goes, “Hey, this is pretty good. Can you do coding? Can you do some JavaScript work?” And I just say yes. I don’t know anything about JavaScript, but I’m like, whatever, I can figure it out.
So I frantically try to learn JavaScript and I can’t. So I go to my friend who is literally just my girlfriend’s best friend’s boyfriend — he’s in computer science — and I say, “Hey, how much would you charge me to do this JavaScript work?” He goes, “I’ll do it for $500.” I think I’m going to get negotiated down by this client, so I go to the client and say, “It’ll be $1,000.” They say okay.
In that moment I was like, oh my God, I just made $500 and I did absolutely no work. That’s the crazy transition of going from being a self-employed person selling your time to being someone who can sell other people’s time. That’s the big leverage point.
Shaan: Did you start devouring any books? How did you learn how to do that better?
Andrew: It was mostly trial and error in the beginning, and it was really stressful, honestly. When you start delegating to other people they always do a worse job than you, and there’s no process or system or anything.
Around that time I read this book called The E-Myth — it’s kind of cheesy, it’s by Michael Gerber, but I recommend it to everyone. He really talks about this idea of thinking about your business as a machine. For me, that was a big breakthrough: my business is a machine, I’m the engineer, and all the different people are widgets within the machine. If one doesn’t work or something’s squeaky, you can swap out the people, but at the end of the day you have a process, a strategy, and people on the bus. If you have the right people on the right bus, the right strategy, and the right vision, things will go well.
That was when things really took off. I had like a dozen people, I was making over a million dollars a year personally, I got a BMW, started dressing nice. But really that first phase was sloppy — you know, okay, I can do all the stuff I wanted to do in college. I can buy beer, go for a nice dinner.
Sam: How old were you when you made your first million in profit?
Andrew: I think I was 22 or 23.
Sam: That’s huge. Oh yeah, it was amazing. You didn’t go to college, right? Or you dropped out?
Andrew: I dropped out of college. I went to journalism school for like two or three months.
Sam: So you did a million in profit two years into being an agency?
Andrew: I started when I was 19 years old, so probably four years in — three or four years in.
Sam: That’s massive.
Andrew: It was crazy. It felt like an absolute fortune, and frankly it was. At that point I was like, I’ll just buy whatever I want. I’d walk into Best Buy and just buy a crazy TV, the best speakers money could buy, video games — whatever an idiotic 23-year-old wants to spend money on. And ultimately your taste doesn’t even match your income yet.
Sam: Did you ever read Rich Dad Poor Dad, Andrew?
Andrew: Yeah.
Sam: He’s got that quadrant thing. You know about that?
Shaan: People hate on that guy — I’m not sure why. But what about it?
Sam: Well, any business guy who becomes popular and starts selling stuff — I think he sells gold, real estate courses, a lot of stuff. But Andrew, you basically just described his quadrant. I remember reading this book. He has this four-quadrant grid: E is the first one, you’re an employee. For most people, this is what your parents tell you — go to a good school so you can get a good job. They kind of make it sound like getting a good job is the end point, the pot of gold.
What he points out is you start as an E, then you go to the bottom quadrant S, self-employed. So you go from employed to self-employed. That’s what you described: barista to solo freelance web designer. Then you go to B, business owner — that’s when you own your agency. And the last one is I, investor. He’s like, the goal for everybody is to get to I, where your money works for you and you do whatever the hell you want.
Eventually with Tiny you became an investor. But this path from E to S to B to I — for me, I didn’t even understand how the board game was laid out. It’s like playing a video game but not understanding you need to save the princess from the castle. Once I know that, I start moving in that direction. But until I knew that, I didn’t really understand what I was supposed to be doing. This one diagram was very useful for me.
Sam: That was level two for you — between what, a million dollars a year, and what was your upper limit?
Andrew: I was paying myself $500K to a million a year, and profiting more than that. And I started incubating businesses.
The “Gym” Phase: Starting Everything [00:19:00]
Andrew: I had that classic thing where I had overconfidence. The way I’d put it is, my first business was a very easy business. I did the equivalent of walking into a gym and picking up really light weights — it built my confidence. Then for the next five to ten years I would walk into the gym and try to deadlift 300 pounds, but I didn’t know that was hard.
So I started an e-commerce business, I started a restaurant, I started multiple software businesses that I bootstrapped, and in one case lost over $10 million. But it was really fun because I would just be in the shower and think, “Oh man, that’s a great business idea. I’ll start that right now.” I had no filter whatsoever.
Sam: Starting a restaurant’s an awesome way to lose money.
Andrew: Oh yeah, I lost about a million bucks doing that. Cat furniture, restaurant, skin cream, SaaS company — I tried the full decathlon of business ideas.
Sam: What was the viral blog?
Andrew: It was called Clients from Hell. It was really big on Tumblr for a while. We’d go to conferences, meet other designers, and everyone would complain about their crazy clients and share screenshots of insane emails — like the guy asking them to make the logo bigger over and over again. So we started sharing those and it went crazy viral. We ended up making a book.
Shaan: Dude, we need to bring back Tumblr. Tumblr was great. I love the Tumblr days. I still go back and read old people’s Tumblrs. It’s awesome.
Andrew: I made so many friends from Tumblr, and I still meet people at conferences who know me from Tumblr back in the day.
Shaan: What age were you when level two ended?
Andrew: I ended that probably around 2017. That was when I sold my first business.
Level Three: The First Real Exit — Pixel Union [00:22:30]
Sam: What did you sell it for, and what was it?
Andrew: I sold it for $7 million. It was the one business I started in level two. So I had my original web design company, Metalab — that was profitable, I’d live off part of that profit, and the rest went to starting all those other businesses I talked about. The one that worked was Pixel Union.
I met Toby from Shopify and Harley as well in 2010 at a conference, and at the time Shopify was pretty small. They said, “Hey, we really love your design work — would you make some templates, some themes for Shopify?” I was like, okay, we could do these guys a favor, they seem nice. I tried to get them to pay me and they said no — it’s going to be like a store, like the iPhone App Store. I was like, I guess so. So we did it. I literally thought we were doing them a favor.
We put up a bunch of themes in their store and started making like $10,000 to $20,000 a month basically immediately.
Sam: What year was that?
Andrew: 2010, 2011. So in 2011 we’re doing $20 or $30 grand a month through Pixel Union.
I had the original design agency, I had Pixel Union making quite a bit of money, and then all these chaotic other businesses. What happened was I decided I wanted a nest egg — enough money in the bank that I didn’t have to worry about money anymore. I had a ton of cash flow but never kept much in the bank. I’d spend whatever I needed personally, and everything else would get invested in the businesses I was incubating.
So I got an offer to sell for $7 million: three million up front, $1.5M earn-out, and the rest in stock in the new business. I remember going to the ATM on the day it closed, in a strip mall somewhere, and I saw 3,000,000 on the receipt. I was like, I’m done. I’m rich. I’m good forever.
That was a big mindset shift. Suddenly I had more money than I could use to incubate businesses. I’d also incubated a lot of businesses and realized that starting companies is really hard. If you think about my failure rate, I probably started ten different projects or companies and one worked really well. There was a lot of pain — laying a lot of people off, going through hard times. I felt pretty burnt out.
And around that time I was like, I guess I’ve got to learn how to invest. To me, investing was something that guys in suits did — super boring. I had no interest in real estate or stocks. But I’d always heard about Warren Buffett. When I read about Warren Buffett, that changed everything.
The Warren Buffett Shift [00:28:00]
Andrew: What I ended up doing was shutting down almost all the incubated businesses. I’d sold Pixel Union for $3 million, had another $1.5M coming in, and also got dividends out of that business because I still owned 20% of it. And Metalab by this point was making three or four million dollars of profit a year. So I went from burning a lot of cash to suddenly having a pile of cash and a lot of unencumbered cash flow just piling up.
By that point, if you’re making four or five million a year — I bought a nice house, not crazy but a responsible nice house. I bought a Porsche and had a Tesla, which at the time was super crazy. And I started getting into investing.
Sam: What was this 20% rule you had?
Andrew: I’ll spend up to 20% of my cash flow personally, and the other 80% has to go back to investing. On 20% of $5 million you can live a pretty good life spending a million dollars a year. So I’d live it up as much as possible, but I knew I’d always be compounding the rest. That model actually worked really well for me because I didn’t have the mindset that so many entrepreneurs have — like I’ve got to live like a pauper and then I get to become a prince, I’ve got to sell my company for some huge amount. I was just able to live on cash flows the entire time.
Shaan: Sam, can we talk about some of your pauper tendencies? Sam chugged a Dr Pepper while you were talking. Sam, what were you doing when you were building The Hustle? How did you live?
Sam: My wife worked at Facebook at the time, so dinner was — I gave her Tupperware containers and she would bring home food because they always had those catered events. So dinner was covered every night. I was on a food-from-Facebook diet because I didn’t get old fast.
The second thing — I’m ashamed to say I did this — do you guys remember when Uber Eats and DoorDash and Caviar all came out at the same time and you’d get $20 free for your first order? I built an iPhone emulator on our computer where we created this ring where we were constantly referring each other so I basically had like $5,000 of free Caviar. People would ask, “Is your startup funded?” I was like, “No, but we are fueled. We’re fueled by VC, just not funded.”
I also would sneak on the bus and not pay, and I’d get caught all the time. The thing is, if they ask for your ID, you just say you don’t have an ID. That’s not illegal — not to have an ID. So I got away with like two grand worth of bus tickets.
Shaan: Hopefully there’s a statute of limitations on these things.
Sam: I was also on a Whole Foods scholarship. Let’s just say the hot bar was right next to the exit.
The 20% Rule and Angel Investing [00:36:00]
Sam: Andrew, when you were spending 20% pre-tax, that’s like 40% of your post-tax money. That’s a lot to be spending. Then you shifted to some other rule, right?
Andrew: I just kept dropping that percentage over time as the numbers got bigger.
Sam: Not because you were spending less?
Andrew: Not necessarily — in some cases I was spending more. The numbers just got bigger. So around this time I started angel investing. I’d meet a friend or some interesting entrepreneur and invest $25K in their company. If I look back, I probably should have bought apartment buildings or stocks — something really boring — as a diversification thing. Instead I was shoveling, you know, $100,000 a month out to all these different startups.
But a lot of that time was actually spent having this breakthrough moment of realizing I don’t need to be the CEO, I don’t need to run my own companies. At that time, every single company — me and Chris — I was the CEO, he was the CFO, and we were just jumping around like chickens with our heads cut off between all the different businesses.
When I read about Warren Buffett, I was like, oh my God, this guy has abstracted business to the craziest degree — to the point where he doesn’t actually do anything except read and buy one business a year. The idea that you could just hire a CEO to run your company was kind of crazy. I felt like — why would someone come and work for me? This doesn’t make any sense. But then over time you realize people want stability, they want certainty, they want health benefits — all the stuff you don’t have as an entrepreneur.
I realized there’s this whole other class of people who want to run a company for somebody else. They want to be a CEO, they want to make millions of dollars, but they don’t necessarily need to make a billion dollars.
That was crazy for me when I started hiring CEOs, because before I knew it all the businesses started doubling. The reason they doubled was because I was only giving 20% of my time to all the companies, and frankly I didn’t know what I was doing. I just started hiring better and better people. There’s this crazy inflection point where we started spinning out the companies, hiring CEOs, buying new businesses, and putting CEOs in to run those. When we started doing that the numbers scaled really quickly.
Sam: You did a lot of angel investing in this period. Have you seen a good return from those investments?
Andrew: I don’t know, to be honest. The problem with angel investing is I mostly just do it on gut. I think I have like $25 or $30 million in venture. It’s been death by a thousand paper cuts. My friend Stuart — we used to share an office — I put $75K into his business and then he sold it to Workday and I 10x’d my money. Between that and a few other investments, I’ve definitely got my money back from that cohort. Maybe made a reasonable return. But the problem is I’ve just kept going and I don’t really track it.
Sam: $25 million of angel investments? That’s an insane amount. Maybe even $30 million? My friend, that is fiscally irresponsible.
Andrew: I know, I know. That’s the problem.
Sam: 10x is not going to return all that money. Why do you think you’ve returned $30 million?
Andrew: No — to be clear, I’m not saying I’ve returned $30 million. I’ve literally put $30 million in. I think from that early cohort I maybe got my money back.
Sam: You don’t have a spreadsheet that tracks this?
Andrew: I do have one, but I don’t count markups as real net worth. Half of them don’t send updates, the other half have markups and I’ll put it in there but I don’t count it. Then another portion, when they sell, you don’t know they’re going to sell until the deal’s done.
Shaan: I count it as the principal I invested — that’s how I think about it too. I think of it as roulette. This period we’re talking about was about learning how to play poker. Poker has way better odds than roulette — if you’re good, you can actually win. You’ve got 60% odds. When you play roulette you’ve got 50% odds. It’s a terrible game. And angel investing is frankly a roulette table.
It’s fun to say, “Oh, I gave this entrepreneur who ended up building this great company $25K along the way.” But I’ve realized it’s more soulless than playing poker. With poker you feel smart; with roulette you feel dumb. And the narratives we tell ourselves — it’s just like roulette where you’re like, “I knew 11 was coming.”
If you talk to a lot of angel investors: you bet on Stuart Butterfield when he was building a game, and then it turns into Slack. Did you know? You might have known Stuart was good, but did you really know?
Sam: And it sucks that you were making your money right at the beginning of the greatest bull market in American history. Starting in 2010 — what are the average returns for the last 15 years for the S&P 500 before inflation? I think it’s 14%, which basically means you double your money every five years. You would have 4x’d your money just doing that boring stuff.
Andrew: That’s one of my regrets looking back. I wish I had bought apartment buildings or stocks and been really disciplined. Instead I was just shoveling money into startups. But I have winners in there — I invested in SpaceX, some great funds, some awesome companies. But unless you’re reporting to LPs, with up rounds you just have to wait.
Was It Worth It? Do You Need to Be a Billionaire? [00:49:00]
Shaan: First of all, thank you for sharing all those levels. It’s interesting, and you don’t have to share — props for being transparent. The takeaway I have is it takes a lot of wandering. You go through these eras, these phases. You have some fun but you learn that’s not the right path. You had a bunch of those and I’m glad you shared them.
I want to ask — do you really need to be a billionaire? What are your thoughts on that?
Andrew: We forgot one level. We forgot the last level.
Sam: What’s the last level?
Andrew: So the last level is when I took my company public and I had tens of millions of dollars in the bank — both in my companies and personally. What’s weird is I’d reached the end. I think that’s the goal so many entrepreneurs think they want. And what I realized is, even then, with all that money in the bank, I was still anxious. I still fought with my partner. I still got irritated with day-to-day life problems.
It’s kind of like travel — we all think we want to go to Bali. The problem with moving to Bali is your brain comes with you.
Before I had anything I would want to pump my own chest all the time because I felt like I hadn’t lived up to my potential. Once things kind of worked out, I was like — I’m going to be more private about this. There’s more to life now.
Shaan: Why talk about it at all?
Andrew: Because I wish somebody had told me. It’s kind of like — oh, money didn’t make you happy. You made a bunch of money and it didn’t fundamentally change your overall level of happiness?
Sam: I think you’re probably smart enough to have not been totally surprised by that. What did surprise you?
Andrew: The weight of the money. This question of, do you really need to be a billionaire?
I always wanted to be. I wanted to be because I didn’t have enough money growing up — money was a four-letter word in our house. My parents thought about money all the time. So in my weird little anxious child brain I said, I want as much money as possible. If I have a lot of money then everyone will stop fighting.
What was counterintuitive is that it didn’t. It actually caused familial discord. It didn’t get me friends; it isolated me because I was unrelatable.
Sam: What do you wish somebody had told you?
Andrew: The question is: what’s the actual amount of money you want to spend each year that makes you happy? Just work backwards from there, and then figure out your life’s work after that. I think overshooting is a mistake that a lot of people make — myself included. They think they need to be a billionaire or worth hundreds of millions when in reality that’s overdoing it. You have one belly and you can only eat so much food. Why do you need 100x that amount of food? If you have 100x the food you need, it’s actually stressful — the food will go bad and you’ve got to do something with it.
The book is kind of like a letter to myself ten years ago.
Shaan: You’re in a weird position where your job as an investor is measured by your returns. But if money wasn’t part of it, would you still be investing?
Andrew: I really like relationships, and I think business is a great way to build them. That sounds cheesy, but business is a shared language. If I meet a guy who owns a plumbing company I know I’ll be able to get along with him because we speak the same language. Through that I can make friends. My zone of genius is building relationships with people, and if I can build relationships and invest in or buy their businesses — I love doing that.
The “Enough” Number: Working Backwards [00:57:00]
Sam: So Andrew, if you were going to go back and calculate how much you want to spend every year and work backwards from that — you get to go in a time machine to 25-year-old you. What would you write down?
Andrew: You want to say: what do I want to spend every year, then multiply that by 20. What do you think you’d want to spend every year back then?
A million dollars — you can live an incredible life, have one house, go on incredible vacations. If you want to fly private, add another million. So that’s $2 million. Add a buffer, call it three. That allows you to get into hobbies and toys and collect cars or whatever. So call it $3 million a year spending.
What’s $3 million times 20? $60 million. I think if you’ve got $60 million liquid, you can live an incredible life spending three to four million a year.
Sam: That’s your target. Then you’d work backwards from that.
Andrew: And I also had these three steps — Launchpad, Enough, and Life’s Work.
Launchpad is how do you make $250K a year, ideally passive. If you can make $250K a year passive, you don’t need a job and you have the freedom to be generative and start the things you want.
Past that, Enough is that number we were just talking about — what’s the amount you want to spend every year, and how do you work backwards from there? Phase one might be starting some online business that makes $250K a year passive — that’s your Launchpad. Then for the next five or ten years you build up to whatever net worth number you really want — call it $20, $30, $40 million, whatever that is.
Then comes the hard part: discovering your Life’s Work. What is that thing you’re intrinsically drawn to that creates meaning? And also — how do you take the byproduct of your machine? You’ve built a money machine. The byproduct of all your investments and businesses is money. How do you make meaning out of that? For some people it’s compounding in more businesses, for others it’s philanthropy, for others it’s art projects. That’s the hard part.
Shaan: Sean, have you done the math? Have you thought about that for you?
Sam: I did, a long time ago, before I sold my first business. My assumption was I’d spend $300,000 a year, and then assuming 4 to 5% — I remember getting to $6 million. That’s the math: $300K a year, you need $6 million. I drilled that into my brain. I said, “Financial freedom is at $6 million.” I made it part of my passwords — it had the number six in it. I just kept at it. At the time I was really focused on it.
I think it was the right way to think about it. Today I spend a little more than that, so it’s not like I was way off. But I think a round number: $10 million is financial freedom for almost everybody. And $10 million is not that hard to get to if you own a business. You should be able to get to one to two million dollars of profit a year and sell for five to ten times multiple depending on your industry. That’s not a hard way to get to $10 million. It’s hard, but it’s simple.
Shaan: Most people will never get to true financial independence. That’s a very lucky few percentage of the population. I did this thing the other night that I’m not really proud of — I went on LinkedIn and searched my college class. Duke 2010.
Sam: Dude, that’s my Friday night routine. I do it every Friday night at 1 AM. I literally have it on my calendar.
Shaan: I’d never done it before. I was like, let’s do this. And I knew, as I was doing it, I was doing it for a kind of messed up reason — I just wanted to feel good about myself. I was like, I think I’ve done well relative to people in my class, but skill or intelligence or talent or even work ethic wise, I was definitely average to maybe below average in my class.
So I’m scrolling through and it was amazing. These people I knew — smarter than me, harder working than me, more talented than me — doing just kind of random jobs. I texted my college roommate: “Man, it’s crazy.” There was one girl in particular — I was like, she literally could have been president. Polished, phenomenal speaker, super hardworking, just knew everything about everything. And today she was running e-commerce for some food brand online. Nothing wrong with that, but you know — the potential was there for a lot more.
If somebody had sat us down senior year and said, “Look, how much money do you want and need? Do the math. Here’s how you get there” — I would have had no idea how to get there. If somebody had said: start a business that gets to this, you sell for this multiple, the whole thing might take five to seven years, maybe ten years total, and by the time you’re 31 you might be there — I would have been thankful. I didn’t know that. My parents didn’t do that. You can’t ask somebody for directions to a place they’ve never been.
I went into the LinkedIn thing trying to feel good about myself, but ended up feeling bad. There was a lot of potential on the table and most people took safety and prestige. They had a good job at a great company. I’d rather have no job at my own company.
The Roulette vs. Poker Problem — And Boring Business [01:11:00]
Andrew: I see so many people do this with startups. They say their goal is financial freedom, and then they go start a venture-backed startup. It goes back to roulette versus poker. If you just started a boring business — trash hauling, window cleaning, whatever — got it to one or two million dollars of cash flow, sold it or held it, you’re set for life. Instead they raise all this money and don’t realize they have a 1 to 5% chance of success. Maybe a 10% chance of an okay outcome where they basically just make whatever they would have made over ten years in a single payout.
So many people are trapped in that way of thinking.
Shaan: There’s this other book that really inspired me — How to Get Rich by Felix Dennis. Far and away one of the best business books I’ve ever read.
Andrew: The real takeaway — it’s similar to my book in some ways — is that at the end of the day the money ruined him. He became addicted to it. He basically says: all my life I wanted to be a poet, and instead I got obsessed with money, addicted to drugs. He goes, “I was a punch-drunk boxer, but instead of boxing it was making money.” He ended up spending $100 million on crack, he died, and his then-girlfriend was a prostitute he’d met.
But the book has ten or fifteen chapters with different lessons. Beautiful writing. He keeps it real. He talks about the levels of wealth.
Sam: Are you looking up the levels right now?
Shaan: Yeah. He has two sets of levels — non-liquid money and liquid money. For liquid wealth:
- $100K to $400K: “the comfortably poor”
- $400K to $1M: “the comfortably off”
- $1M to $2M: “the comfortably wealthy”
- Then the Lesser Rich, Comfortably Rich, the Rich…
- $70M to $100M: the Seriously Rich
- $100M to $200M: the Truly Rich
- Over $200M: the Filthy and Super Rich
Andrew: Yeah, it’s a great chart. I love that chart.
Shaan’s Dan Clancy Story: No Deferred Life Plans [01:18:00]
Shaan: I got to disagree with one thing you said, Andrew. I think you have a belief that you should focus on these increments — get to $250K, get a few million in the bank, then start figuring out your life’s work, decide how much money you really want, get to your enough number. Is that right?
Andrew: Yeah, but I think that if you overshoot it causes a lot of stress.
Shaan: I want to tell you about a meeting I had. My company got acquired by Twitch, and Twitch hired this new guy, Dan Clancy — who’s currently the CEO of Twitch. I go into Dan’s office and he’s my new boss. He’s like, “I do one-on-ones with my direct reports. I want to have a good relationship, understand where you’re trying to go, and help you get there. What’s the dream for you? You’re an L7 — want to get to L8?”
I think L10 is the CEO. It’s this weird system — you get to L8 and then you either get to L10 or you don’t. So he asks what’s the goal. In my head I’m thinking: do I tell this guy I don’t really care about being here, or do I have to pretend?
I go with the truth. I say, “Honestly, I did this deal, that amount of money kind of matters to me. I want to invest it out and have fun while I’m here. Not looking for a long-term fit. Not a one-night stand, more like a one-year stand.”
He doesn’t flinch. He goes, “I don’t want to waste time figuring out your path here, but I also don’t want to check out on you.” And then he says, “Tell me the plan outside of here.”
And this is where I fell into my old way of thinking. I had this insecurity that made me want to say something very ambitious. In Silicon Valley you’re measured on how ambitious your story is — what are you trying to change and disrupt? So I said, “I really want to start a school. Like a university.”
I give him the whole speech. I say, “To do this, you need three things: skills, capital, and connections. What I’m doing right now is building all three up. Building capital by being here, building skills by doing this, building connections by doing that.” I give him this whole framework I’m so used to getting nodding approval for.
He does not nod. He goes, “I don’t buy all that.” And then just doesn’t say anything more.
I’m like, okay, well what do you want me to say? He goes, “I don’t believe in the Deferred Life Plan.” He says, anytime I hear somebody who wants to do something and then gives me a bunch of reasons why they’re not going and doing it right now, it tends to be a bad decision to not do it now.
“It’s okay if you don’t know what you want to do — then sure, wander around, try to figure it out. But if you know, you’re an entrepreneur. If somebody told you they wanted to start a business, would you tell them: first go to business school, read ten books, do a practice session, hire a coach? No. You tell them: start the business and you’ll figure it out as you go. There’s no real substitute to getting good at the thing besides doing the thing.”
There’s something good about getting served like that — just getting owned to your face. You’re like, huh, thank you. That was a real gift. You could have just nodded along and said, “All right, good luck.” Instead he shook me up and changed my frame.
So the only thing I’d say, Andrew, is — you have this thing of “go figure out your life’s work.” But maybe a better plan is: start by asking what do I really love doing? You loved designing websites, designing products. You might have been happy just doing that. You might have made as much money if you’d just gone for that, versus the way you actually did it — and definitely the way I did it — which was: first I’m gonna go make the money, then I’m gonna do the things I want.
As I look back, I don’t think you need to do it that way. That works — it’s one way to make it work — but you might be better off just going and trying to do the thing if you know what the thing is.
The Fisherman and the Businessman [01:27:00]
Shaan: Do you know the parable about the fisherman and the businessman?
Andrew: Yeah, love that one. So good.
Shaan: Okay, so there’s this Wall Street guy on vacation on a small tropical island. He sees this man fishing by the water and walks up and says, “Hey, what are you up to?” The fisherman says, “I’m fishing for the morning. I’m gonna get a fish and feed my family.” The businessman says, “Will you ever think about turning that into a business?” The fisherman says, “Well, how would that work?”
“First you get a couple buddies and fish more, get more fish, then sell them at the market.” “And then what?” “Then you buy a boat and you’re even more efficient. You could freeze them, ship them all over the world.” “And then what?” “Then you get a fleet of ships.” “And then what?” “And then you take the company public.” “And then what?” “And then you could retire and just fish all day.”
The guy is already doing the thing he loves. Why would he go and build this big business?
I think it’s: do you want to chop wood in your backyard or do you want to own a sawmill? Do you want to be Jiro from Jiro Dreams of Sushi or Steve Ells from Chipotle? That’s the ultimate question — what is your happy place, and how can you optimize your life around being in that?
Andrew: Yeah. I remember one time I told that story and I was like, wait, what’s the punchline? I’m not really sure what the takeaway is. Should I go fish? I don’t know.
Shaan: It’s a good story though.
Never Enough: The Book [01:30:30]
Sam: Andrew, when does the book officially come out?
Andrew: July 9th.
Sam: It’s actually a great book. I have a lot of friends who’ve come out with books, and Never Enough is actually one I sat down and read the entire thing — not because I was trying to be your friend, but because I thought it was awesome. The writing’s good.
Shaan: What are you looking at, Sam?
Sam: I’m looking at the book. I had the same reaction. I would have said it’s a good book anyway because you’re my friend, but it actually is a good book. I read it in like three nights. I read it when it was still a PDF.
There are three good stories I remember. There’s the Charlie Munger story — the crazy way you ended up meeting your hero and almost doing a business deal with him. There’s the Pixel Union sale-and-buyback story — that was a great one, your first big win in terms of an exit, and you shared the numbers and talked about how it went down and how it went slightly wrong. I liked that story.
And then the last one — I won’t give it away, but the ending is dope. It was so good I was like, did he just do this for the book? Did he just make this ending so good that he needed it to happen in real life? Was that real?
Andrew: It was all real.
Sam: Dude, thanks for doing this again. Never Enough — what’s the best place to buy it?
Andrew: Go to neverenough.com — there are all the links there. Or just go on Amazon and buy it.
Sam: And that’s the pod.