From Design Agency To $419 Million Holding Company In 8 Years

Summary

In this podcast episode, Jeremy, an early employee of Tiny, shares his experiences in building a business empire from $5 million to $500 million in equity by acquiring and scaling small cash-flowing businesses. The discussion delves into the early days of Tiny, the first deals, negotiation tactics, and the importance of trust and community in business. Jeremy also reflects on the lessons learned from successful and failed deals, emphasizing the value of due diligence and the art of creative deal-making.

Takeaways

• 🎙️ The host highly values Jeremy's insights, having pursued him for six months to appear on the podcast due to his impressive performance on a previous show.
• 💼 Jeremy was the first employee at Tiny, which transformed $5 million in starting capital into approximately $500 million in equity by acquiring and recycling small cash-flowing businesses over a decade.
• 🌱 Jeremy's early involvement with Tiny began informally, working alongside founder Andrew Wilkinson in a shared studio apartment that served as an office space.
• 💡 The concept of Tiny originated from the excess profits of Metalab, an agency that generated significant cash flow, which they decided to invest in buying other businesses.
• 🔑 Jeremy emphasizes the importance of having a concrete business idea or deal as a starting point, rather than abstractly planning a fund or holding company.
• 🤝 Trust and relationship building are critical in business acquisitions, especially when dealing with sellers emotionally attached to their businesses.
• 📈 The initial business model of Tiny was simple: use the free cash flow from an existing agency to bootstrap the acquisition of other businesses.
• 📊 Jeremy discusses the limitations of financial models and the importance of understanding the underlying business and market potential rather than relying solely on projections.
• 💰 He shares that Tiny often did not offer the highest price for businesses but won deals by offering other valuable elements like speed, trust, and a good working relationship.
• 🤔 Jeremy reflects on the importance of recognizing when not to pursue a deal due to red flags, even if the potential upside is attractive.
• 📧 He advocates for the effectiveness of cold emailing as an approach to networking and business development, provided one is prepared and capable when the opportunity arises.

Q & A

What was Jeremy's initial role at Tiny?

Jeremy was the first employee at Tiny, and he was there before they even had a name, playing a crucial role in the early days of the company.

How did Tiny turn $5 million into $500 million?

Tiny achieved this by buying small businesses that generated cash flow, recycling the profits, and growing their portfolio over a period of about 10 years.

What was Jeremy's background before joining Tiny?

Jeremy had been working on another startup and shared the same studio apartment as Andrew Wilkinson, the founder of Tiny, which is how he got involved with the company.

What was the initial business model of Tiny?

The initial business model involved using the excess profits from their agency, Metalab, to buy other businesses and grow their portfolio.

What was the first business that Tiny bought?

The first business they bought was Dribbble, a social platform for designers, which turned out to be an amazing investment.

How did Tiny approach deal negotiations in the beginning?

In the beginning, Tiny's approach was quite informal. They would use online resources like Legal Depot to draft LOIs (Letters of Intent) and were not afraid to make aggressive offers, learning as they went along.

What is Jeremy's view on the use of financial models in business valuation?

Jeremy believes that while financial models can provide a sense of comfort, they often involve a lot of assumptions and can sometimes be misleading. He suggests focusing on more fundamental aspects of the business.

What was the worst deal Jeremy was involved in, and what was the main lesson learned from it?

The worst deal involved a dishonest partner, and the main lesson learned was to trust instincts when something seems off, even if the deal appears to be very good.

What is Jeremy's advice for cold emailing potential contacts?

Jeremy suggests that cold emailing can be very effective, especially for young people or students, but emphasizes the importance of being prepared and having something valuable to offer when the opportunity arises.

What was the most unique or weird deal that Jeremy recalls from his time at Tiny?

One of the most unique deals involved buying a business unit from a Fortune 500 tech company that was being divested quickly, which they were able to acquire for almost no money down.

What is Jeremy's perspective on the importance of the 'soft' aspects of a deal?

Jeremy believes that the 'soft' aspects such as trust, speed, and the ability to get a deal done are often more important than the price, especially when dealing with sellers who care about their business post-sale.

Outlines

00:00

🎙️ Podcast Introduction to Jeremy's Story

The host introduces Jeremy, the first employee of Tiny, a company that started with a $5 million investment and grew to a $500 million equity value by acquiring and scaling small cash-flowing businesses. Jeremy's experience at Tiny, which was initially known for its agency work, is highlighted, along with the host's anticipation of discussing Jeremy's journey from the company's early days, including the first deals and the strategies employed for success.

05:01

🚀 The Genesis of Tiny and Its Initial Deals

Jeremy shares the origins of Tiny, which began as an agency with excess profits that were reinvested into buying businesses. He describes the process of learning to negotiate and structure deals without formal experience, using online resources and a trial-and-error approach. The importance of trust in acquisitions, especially when dealing with community-based businesses, is emphasized, along with the story of Tiny's first major acquisition, Dribbble, which turned out to be an incredibly successful investment.

10:01

📊 Reflections on Financial Modeling and Deal Evaluation

Jeremy discusses the limitations of financial modeling in business acquisitions, using the example of Facebook's IPO and the inaccuracies of long-term growth predictions. He suggests that a more qualitative approach, considering the potential for growth and the uniqueness of the business, can be more valuable than complex quantitative analysis. The conversation also touches on the importance of being able to execute a deal at a 'no-brainer' price, rather than overpaying based on assumptions.

15:03

🤝 Chris's Superpower and the Dynamics of Tiny's Partnership

The host inquires about Chris's role and strengths within Tiny, highlighting the complementary nature of the partnership between Andrew, Chris, and Jeremy. The unique structure of Tiny is discussed, where partners could pursue individual ventures while sharing a common platform. This dynamic is credited with preventing Tiny from becoming a 'prison' of shared interests and allowing for diverse investment strategies.

20:04

💡 Negotiation Strategies and Lessons Learned

Jeremy shares insights into negotiation tactics, emphasizing the importance of silence and patience in reaching agreements. He recounts experiences where aggressive, low offers were surprisingly accepted, and how the perception of support from a team can influence a seller's willingness to negotiate. The discussion also covers the value of presenting a united front and reframing negotiations as a collaborative problem-solving process.

25:06

💌 The Power of Cold Outreach and Asymmetrical Trades

Jeremy discusses the effectiveness of cold emailing as a means to establish connections and opportunities that may seem disproportionate to the effort involved. He encourages the practice, especially for younger individuals, and stresses the importance of being prepared and valuable when the opportunity arises. The conversation highlights the scarcity of talent and the universal interest in meeting genuinely interesting and talented people.

30:06

📉 Tales of Deals: The Best, Worst, and Most Unique

Jeremy recounts his experiences with various deals at Tiny, including the best deal with Dribbble, a worst deal involving dishonesty, and a uniquely profitable deal involving the acquisition of a business unit from a Fortune 500 company. He shares the lessons learned from these deals, such as the importance of due diligence and the ability to act quickly in certain situations.

💰 Creative Deal-making and the Art of Buying for Free

The final paragraph discusses a creative deal where Tiny acquired a business for effectively no money down, leveraging a domain name that held significant value. Jeremy explains how understanding the unique needs of sellers and being able to close deals quickly can lead to extraordinary outcomes, such as acquiring profitable businesses at minimal cost.

Keywords

💡Podcast

A podcast is a digital audio program that can be subscribed to and downloaded automatically when new content is available. In the context of the video, the host has been pursuing a guest for his podcast, indicating the importance of the guest's insights and the value that the host believes the audience will gain from the interview.

💡Tiny

Tiny is the name of a company discussed in the script, which started with a small amount of capital and grew significantly by acquiring businesses. It represents the concept of a business empire built from humble beginnings and is central to the narrative of the video, showcasing a successful entrepreneurial venture.

💡Equity

Equity refers to the value of an owner's interest in a company, often represented by shares. In the script, the transformation of $5 million of starting equity into $500 million illustrates the substantial growth and financial success of Tiny, highlighting the power of smart investments and business acquisitions.

💡Cash Flow

Cash flow is the net amount of cash moving into and out of a business. The script mentions buying businesses with positive cash flow, which is a strategy Tiny used to recycle capital and invest in more businesses, emphasizing the importance of cash flow in business growth and investment strategies.

💡Negotiation Tactics

Negotiation tactics are the methods and strategies used in discussions to reach an agreement. The script refers to tactics learned by the guest, which likely include how to effectively communicate offers, manage expectations, and close deals, showcasing the skills necessary for successful business transactions.

💡Bootstrapping

Bootstrapping is the process of starting a business with minimal capital and growing it organically, often by reinvesting profits. The script mentions bootstrapping a business that generates millions in free cash flow, which is a testament to the founders' ability to build a successful business from the ground up without external funding.

💡Dribbble

Dribbble is a social networking platform for designers, which is mentioned in the script as an example of a successful business that Tiny acquired. It represents the type of community-driven business that can be a valuable addition to a portfolio and contribute to the overall growth of Tiny.

💡Deal Sourcing

Deal sourcing is the process of identifying potential business acquisitions. The script discusses the strategies used by Tiny to find and evaluate businesses for acquisition, which is a critical component of their growth strategy and a key theme in the video.

💡Discounted Cash Flow (DCF)

Discounted Cash Flow is a valuation method used to estimate the value of an investment based on its future cash flows. The script mentions DCF as a tool that the guest used to evaluate potential deals, highlighting the importance of financial modeling in making informed investment decisions.

💡Community Business

A community business is a type of enterprise that is built around a community of users or stakeholders. The script refers to the challenges of managing a community business, such as Dribbble, where the community's sentiment can significantly impact the business's success, underscoring the unique dynamics of such businesses.

💡Cold Email

A cold email is an unsolicited message sent to someone with whom the sender has no prior relationship. The script discusses the effectiveness of cold emailing as a means of outreach, suggesting that it can be a powerful tool for establishing new connections and opportunities, which is a key takeaway for viewers.

Highlights

Jeremy Gon, the first employee at Tiny, shares his experience of turning $5 million into $500 million by buying and recycling small cash-flowing businesses.

Tiny's initial strategy was to use excess profits from their agency to invest in businesses, leading to significant growth over a decade.

Jeremy discusses the early days of Tiny, before it even had a name, and the challenges of being a young first employee.

The importance of having a concrete business idea or deal as a starting point for building a company or investment strategy.

Jeremy's experience with Dribbble as a significant investment and the process of identifying and acquiring successful businesses.

The approach to underwriting deals and the reliance on day-one levers to improve businesses immediately post-acquisition.

Jeremy's skepticism about the value of complex financial models and the preference for simpler, more intuitive assessments.

The concept of 'price as due diligence' and the strategy of offering fair deals to win over sellers who care about their business's future.

Negotiation tactics learned at Tiny, including the power of silence and presenting offers without immediately justifying them.

Jeremy's worst deal experience, highlighting the dangers of ignoring red flags due to greed or perceived good deals.

The importance of character and trust in business deals, and the consequences of working with dishonest partners.

Jeremy's insights on the power of cold emailing as an effective method for networking and opportunity generation.

The story of Mealime, a successful acquisition by Tiny, demonstrating the value of investing in well-crafted apps with a clear user benefit.

The unique deal where Tiny acquired a business unit from a Fortune 500 company for virtually no cost, showcasing creative deal-making.

Jeremy's perspective on the importance of having a 'release valve' in partnerships to prevent business from becoming a 'prison'.

The strategy of focusing on what is most important to the seller in negotiations, rather than just the financial aspects of the deal.

Jeremy's advice on approaching negotiations as a collaborative problem-solving exercise, rather than a competitive battle.

Transcripts

all right I've been chasing this guest

today for six months begging him to come

on the podcast because I heard him on a

podcast last year and as much as this

breaks my heart to say it that was my

favorite business podcast of the year

and it wasn't even our own but he was so

good that I asked him to come on his

name is Jeremy gon he is um he was the

first employee at tiny which you've ever

listened to the podcast we've had Andrew

Wilkinson on many many times they

basically turned $5 million of starting

money into about $500 million of equity

just by buying businesses that cash flow

so they bought you know small businesses

that cash flowed kept recycling

recycling recycling over 10 years turned

into 500 million so I wanted to ask him

uh what was it like in the early days

what were those first deals like he was

there before they even had a name before

they were even called tiny so we asked

him about his best deals his worst deals

the weirdest deals he's ever done

negotiating T tactics he learned this

episode is amazing it's a 10 out of 10

for me um enjoy this episode with Jeremy

what's up Jeremy welcome to the show we

figure we've uh we've had your mentor on

enough times now Andrew he's probably

the the most popular guest on the show

uh enough of Andrew we got to go to his

Pro we got to go to the Young Gun who

was there from the beginning and uh and

have you on welcome to welcome to the

show man thanks for having me guys let's

put tiny into context because I think

maybe somebody listening to this doesn't

doesn't actually appreciate what we're

talking about tiny the simple story of

tiny is um they had a Services business

an agency and then they had excess

profits and I think you can correct me

if I'm wrong but I think the numbers

were something like they took five or

six million dollar of initial initial

equity and they put that into tiny and

we're like okay we're going to go try to

buy a business with this and they've

ended up turning five or six million of

initial startup Capital into roughly

A500 $600 million public company where

they own you know tiny owns maybe a

portfolio of 30 businesses or something

like that over over roughly uh 10ish

year yeah eighty year period so kind of

amazing in eight years turn $5 million

into $500 million like okay I'm I'm

doing round math here fuzzy fuzzy

numbers but first of all is that the is

that the right math is that roughly the

right story and um and then you know

walk us through the beginning days of

that because you were there at the very

beginning at 19 20 years old employee

kind of number one there uh walk us

through that yeah so I I knew Andrew

because when he was starting metalab and

I was working on another startup um we

shared the same studio apartment our

office was in a studio apartment and uh

he was in like the bedroom area and we

were in the the kitchen and we would

keep a keep a blowup mattress in case

the fire guy came around and we would

just say oh you know Andrew lives here

but just have a lot of friends over uh

you know working on stuff um and yeah I

mean effectively like metalab the store

the short version is metal lab you know

was throwing off a fair amount of free

cash flow I think it was in that range

of you know low Millions a year year and

the idea was just to go use that free

cash flow to buy buy a business and you

know um that's the thing with agencies

right like there's not a lot of

reinvestment so you got to do something

with the cash and if you're not going to

put in the S&P like that's too boring or

whatever then you got to figure out

something to do with it um and so that's

that's kind of what we did it's funny

like people a lot of people hold codes

and stuff are really popular now and

people you know a lot of people ask how

do I build tiny effectively and the

first step is like well you know

bootstrap a business that makes millions

of dollars of free cash flow and then

like get back to me the the rest is like

pretty easy and that's the first start

and you said it took eight years in

reality I think metalab uh the agency

that was already eight years older I

don't I don't know what it was but it

yeah that's right metalab was probably

15 16 years old now so it was a long a

long slug I mean Andrew just started

really young it was also one thing

that's really helpful is Andrew and

Chris and myself I mean we were all big

users and fans of dribble um and uh and

we Andrew really had that company in

mine for a long time which I think is

another really nice thing to have like

it's very good to start with a deal even

when like even when you're fundraising

or whatever to to actually have a

concrete thing that you want to go do

and use that as the jumping off point

for you know building whatever it is I

think it's always so much better to have

that than to kind of be like abstractly

Oh I'm gonna start a fund or I'm gonna

start a holding company or whatever um

and so it was like dribble is really

cool uh we would love to we would be the

right owners for that uh Andrew knew the

co-founders there and maybe we could buy

that and that would be a starting off

point and it's all very like real and

concrete versus the we're going to build

a holding company of Technology

businesses or something like that now

you're three guys who've never bought a

business before take me back to you're

sitting in the the kitchen or whatever

of your apartment sloff hangout Lounge

uh are you guys like hey can we like buy

like buying Businesses for Dummies like

how did you even figure out how to do it

and also if this was a good idea because

it's a big risk right I think you know

probably four five million bucks of

equity went into that deal that's like

kind of like that's a big deal that's

not like a couple hundred grand uh at

that stage so like what were those

conversations like at the beginning as

much as best as you can

remember yeah I mean it was you know

like

anything there's generally one way that

you can categorize sellers it's people

who care about what happens to the

business after they sell it and people

who don't and um certainly for people

who care it's a lot about it's this huge

trust exercise of you know are you going

to screw up my baby like in their case

they've been working on it for a really

long time their names were very attached

to it there was a big community

community businesses are really

difficult you know the community can

really turn on you fast um and so yeah

there's that whole piece and then

mechanically yeah it was literally like

I don't think we even had a book we just

looked it up online like I would

literally go on legal Depot and like get

a Loi off there and edit it and you know

for the first few deals like you know I

was 1920 and Andrew would be like can

you go get a Loi for this and I didn't

know what that was we just go download

one and write it up and it's interesting

because one thing that we didn't like

this is an example of just the benefit

of not having a lot of experience

typically when you do an Loi it's pretty

far along in the process um and we would

just fire them out because we read them

and in an Loi the only thing that's

binding usually is the exclusivity and

nothing else not the price or anything

else and so we thought okay like this is

a totally non-binding thing so let's

just like Chuck it out there it's nice

to have something on a piece of paper

it's kind of like a term sheet um

although even term sheets like um

socially are more binding and we didn't

realize that oh in private equity and

Loi is like a pretty sturdy commitment

or whatever and you know that was for

better and For Worse on one hand it let

us move really fast on the other hand we

learned quite quickly that okay you're

not supposed to go back on like what you

Chang in an Loi and that kind of stuff

and we and and so there's all those

little things where just not being

familiar with the process really kind of

let us move fast it let us be friendlier

and that was the whole point like we had

both had these kind of bad experiences

with uh with with Buyers um and we

thought you know there's got to be like

a better service to be done there

basically I had a handyman come over

yesterday and he comes to my front door

and he's like show me what you need done

whatever and I said great that's what I

need done and he goes here before we

start I need you to do something and he

pulls out a notebook and he wrotes and

he writes my rate is $50 one hour per

one hour and he hands it to me he goes

sign this for me and I just I go okay

cool I'm

aware that

he's like that way spits in his hand

shakes it he's like this is no official

and I was like I I appreciate I appr

appreciate your style that's that that

was like the tiny

Loi hey real quick you know one of the

cool Parts about what we're doing is

that people have reached out and told me

that they've built actual million-dollar

businesses made their first million off

an idea they heard on the show that is

crazy that's wild that's why we want to

do the show and we want to see more of

that one of the questions we get asked

over and over again is is there some

kind of idea database spreadsheet where

we list out all the different business

ideas that we've talked about well the

answer is finally yes to find Folks at

HubSpot have dug through the archive and

pulled out 50 plus business ideas and

put them into a business idea database

it's totally free you can click the link

in the description below and get the

database for you all right now back to

the show so at the time was dribble like

an Obviously good business because it

turned out to be an amazing investment

probably like a I don't know what is it

like a 50x on your money there right

like it's yeah more than that more than

a 50x amazing

what did you guys like try to underwrite

the deal were you like in Excel like

dragging some like you know 10% growth

like dragging it over 20 columns like

how did you guys what did the deal look

like and what what did you expect again

it was it was pretty obvious that it was

a great business and I think Andrews

told this story before but there was

some immediate day one levers around

like a big part of the business was

advertising and we could find better

advertising providers and things like

that so there was levers you could pull

on day one that were going to improve

the business um but yeah it just felt

like this big opportunity it was a top

10,000 website it had millions of active

users it was very important you know

when it launched like I think I bought

my dribble invite on eBay or something

like that it was really hot for a while

and it it was just this kind of like

cool thing that didn't really exist you

know there's not a lot of independent

social networks that have millions of

users um and you know we we we

negotiated a pretty fair deal I think

like you know the other Buffet line is

price is my due diligence and that helps

a lot but no never thought we never

thought any of the deals could be you

know 50 plus X's um we were always just

like you know can we make 20 or 30% cash

per year from this business and that

would be great and anything after that

is just kind of kind of upside um you

know I I think and and yeah regarding

models you know Andrew used to make me

do discounted cash flows because it was

kind of like the thing that you felt

investors ought to do and then at some

point I was like here is your stry but

I'm just making up all the assumptions

in this spreadsheet and I think it was

like so many of these things are just

like um comfort blankets or whatever you

just like it makes you it's this big

scary thing that you're doing and it

makes you feel better that you have it

so you can look at it and be like yeah

like we've modeled this out you know but

it's like it's [ __ ] you're just

you're just making it up you also had a

great quote you were like uh you you

said something to me you go the more

quantitative analysis so the more

numbers number numerical analysis you're

doing about a business the more you're

commoditized in your analysis what does

that what does that mean unack that one

yeah my my favorite anecdote here is in

the Facebook IPO Barkley's put out this

research report where you know they say

what they think the business is going to

be worth and um the way they do that is

through a discounted cash flow and and a

part of that calculation is like what is

the terminal growth what is this thing

going to grow out forever and they put

it at 3% which is what most companies

are and so that got them to a $200

billion do valuation now the next 10

years it grew 30% a year and it's A2

trillion dollar company and it's just an

example of like you know you do all this

modeling and this research report and

you're just so off like you you're an

order of magnitude off and so like what

was the point of doing any of that it

would have been better to think really

hard about how actually how much can

Facebook grow like just kind of this

first principal stuff right of what

percentage of the planet could use this

like a lot more basic um and yeah that's

a lot of the quantitative stuff also a

lot of the quantum stuff is totally

commodified right so people like know

how to do this you can learn how to do

this in school and therefore maybe it's

like a useful table Stakes thing but

you're not going to get any Edge that

way because everyone can do it and where

the edge is in quantitive stuff is you

know in the two sigmas and Jane streets

and the MIT phds and you're not going to

be doing that either and so you're not

going to like do a better model on a

company than than the next guy and

somehow get some Edge there so then when

you're looking at a deal when you're

trying to for like a small bootstrap

business a business doing anywhere from

a million to 30 million in

Revenue what are you looking at to spot

the opportunity if it's not the if it I

mean are you how much do the financials

and the the cash flow statements

actually even factor into that or you

just thinking I can make this bigger I

mean what what part of the numbers

actually matter to

you yeah it's pretty basic right it's

like okay let's you know let's make up

numbers it's doing $5 million a year of

Revenue a million dollars of earnings

and you think okay on day one I could

you know raise the prices by 30% I could

um reduce headamp I could launch this

new product

whatever uh would you pay you know would

you pay a million dollars for that yeah

of course would you pay $3 million yeah

probably and then you you can just kind

of go and I think where modeling gets

important is when you're like at the

very edge of that you're like would you

pay $10 million for that and then it's

like well a lot of things would have to

go right maybe or whatever but there's

some number there where it's like yeah

you know i' pay $3 million for business

making a million dollars and so then the

trick becomes okay can you get the

business for $3 million and that's where

it's like you know tiny was in a lot of

bids with other other folks and I don't

think we were ever the highest actual

price but we often won deals because we

could offer other things so that comes

back to like why you on the deal you

know it's because like the very common

thing that would happen is we'd get

pretty far with the seller and then

they'd say Hey you know we like you guys

but we've got this offer for 25% more so

we're going to go take it and you know

very often be like great like go explore

that and then turns out that offer was

not as real as you thought or it was six

months of whatever uh there's more debt

or they didn't have the financing and

then you actually figure out that oh

there there is like other things in the

deal that are important like the ability

to get it done the ability to be honest

to be trustworthy to do things fast like

all those other soft things um and so

it's more

like are you able to get a price that's

really a no-brainer at least that's how

I look at it versus I really think I'm

smarter than everyone else and I can pay

slightly more I mean that works for

people people do do that but it's just

like a totally different game I'm always

fascinated by the people Behind These

businesses what can I learn you know

tiny is a great business but it was

created by people it was created by

Andrew by Chris by you and I'm like what

do how do they think about things what

do they know about what they're doing

what worked for them what are their

ultimately what are their superpowers

and I asked you what's Chris's

superpower because forget Andrew

everybody knows Andrew he's popular he's

out there he talks he's got a big

following almost nobody knows Chris I

had dinner with Chris and I was like I

[ __ ] love this guy this guy's he's

dynamic he's really engaging he asks

great questions and so I've only known

him for a couple hours of my life you've

known him for a lot longer than that

what is Chris's superpower that that he

brought to

Tiny I mean Chris's superpower is just

being able to Andrew is so high pace and

so high energy that Chris is just able

to modulate that and kind of be the

sober second thought you know we're not

going to do this or that's way too much

or or whatever um you know a very

interesting piece of the tiny

partnership um at least at the beginning

that I thought was really quite unique

and interesting is that you know Chris

and Andrew had tiny as this vehicle that

they would share together but then they

could also do things on their own you

know Investments businesses and that

actually like I don't even know if it

was intentional but that provides this

great release valve of okay like all the

time you know Andrew would come up with

some you know cocky motion about some

restaurant or whatever and he would just

say I'm going to go do that on my own

and Chris could have the same thing like

Chris was great at investing in public

equities and he could go do that on his

own and I um I know that doesn't

directly answer about Chris's superpower

but it is this like interesting

structure I think one thing that can

really go wrong in Partnerships is if

it's like you're dedicating your whole

life to this thing and everything you do

is going to be be through it it can

really turn into this prison if you

don't share the same taste as as your

co-founder and so having this like

release valve and being aware of that is

is really nice people normally pick

Partners who are like them right but

they but Andrew and Chris are not like

that you know I guess is that a what

what did you learn from that yeah I mean

I would also say like Andrew is really

good at sales and kind of creating this

new vision and then Chris is really good

at being kind of the negotiator and

actually like getting a good deal and

structuring it well and everything um

you know there's all kinds of things

about about negotiation like one thing

that would be like structurally another

interesting thing is you know I would I

would be kind of the the front guy on a

lot of deals and would come back to them

and they would kind of be quarterbacking

it and what was nice is like I would

throw it an offer that I thought was

really aggressive and it was kind of the

most that I could like emotionally

stomach aggressively High aggressively

high low you know really low really low

and so this is I I want to be clear this

was back like in the early days when we

had no money and we were really trying

to like be Scrappy um tiny is not really

like this anymore but and then I would

say okay like I've really got this down

uh you know and then they would just

look at me and because they' never talk

to the the the seller and just say I

think you can do like 25% Le at less and

like sometimes I feel like I want to

throw up you know talk through that when

you have to present a [ __ ] offer to

someone I I imagine some a lot of times

maybe not a lot 10 15% of times they're

like

okay yeah more than that and actually

what's even rarer is at least I I always

have this fear that they're just going

to lose it you know like dare face and

that almost never happens it happens

sometimes but it almost never happens

and another nice Dynamic there is you

can always say well hey like I'm on your

side like I you know it's the old uh car

salesman gamut of like my manager's

killing me it's the same exact setup

right um and that's that's super helpful

and you know uh Chris shared all kinds

of tricks with me like um one great one

is it's always best to just kind of when

you float an offer to just not say

anything else people will immediately

start negotiating against themselves and

so one trick that you can use if you're

on I guess it probably doesn't work on

Zoom but um if you're on just a call is

you can like say your offer and then hit

mute and then you can like be like you

can start saying oh you know whatever

but they'll just hear the science

silence and um that's a big thing as

well because oftentimes you just need to

let it float and sit out there but it's

like too uncomfortable for you to

actually do that dude I've got this

friend who works in the CIA and I was

talking to him uh and he has to

negotiate with people you know basically

his job is to convince people to become

spies so if he goes to the Middle East

he has to convince a guy who's loyal to

some country in the Middle East to be

commit treason and when he like goes to

these negotiations his tactic because he

said the same thing he goes I say what I

want and what I want to happen and then

I shut up and uh I we we his other

cooworker was there and he was like

who's not uh who's not part of that he's

like dude they do this to me all the

time just at work I'll notice they say

something and I just want to fill the

silence and I want to keep talking and

it because makes me uncomfortable and I

end up just talking talking talking and

they sit back not saying a thing and

they always get their way yeah totally I

mean one one very cynical way of looking

at negotiation um is that it's just who

can bear to be uncomfortable longer um

and and like that's certainly true you

can do that in a retail setting you know

Sean does that all the time Sean I think

we when he negotiates the king of the

awkward silence yeah he's the he's very

comfortable I have a condo on Awkward

Island

yeah he's he's the mayor of of that area

where he's just very comfortable being

uncomfortable in a conversation Jeremy

you told me something else that Chris

taught you that is less about kind of

the the kind of the gamesmanship I think

when we when we think about

negotiation we often think about the

gamesmanship what do I say and I think

you already said one interesting thing

is which is a lot of times is what you

don't say it's to stop talking and let

them talk but another piece you had

mentioned to me was like it's not you

vers them can you explain that like how

taught you it's not you vers them the

the way that I like to frame it the more

kind of mature the way that you can

really do I think for your entire life

and not kind of get you know be known as

this like bastard who's just Relentless

to NE negotiate against it's kind of I

love this idea of in a traditional

negotiation you're sitting across the

table from one another and the way that

I really like to reframe it is um you're

both sitting on the same side and what's

on the other side of the table is the

problem and the problem can be you want

50 million for the business I want to

pay 20 but it's still this like okay

this is a problem let's work together to

figure this out and it's this very

subtle thing but it makes a huge

difference and that's I think that's how

you start to unearth okay maybe like

it's actually not it's cash and

something else that's more important for

you why do you want 50 what is it that's

50 but so important and why can I feel

like I only can pay 20 or whatever and

that works really well I use that every

day you can use it in like a

relationship problems and everything of

kind of like making the problem other

and then putting it out there and being

like let's work together on solving this

thing and there's just something so much

better about that than the kind of like

I'm going to hit mute and stare at you

and like break you you know like well

see Jeremy the problem that we're trying

to solve is I want the money in your

bank account to be in my bank account uh

yeah exactly I want that I want that

Chase account to say 5

zero

yeah no it it is true though uh uh you

know one of the things my dad taught me

one of the best things my dad ever

taught me he's like when you go into a

negotiation it's not same thing it's not

us vers them he goes make a table of

your needs and your like basically your

needs and then your gives so like what

do you have to offer and then what do

you what do you need back and then what

do they have to offer what do you need

back and they're never like perfectly

symmetrical it's not like and so for

example some of the things they need are

very easy for me to give cost me nothing

or I'm totally comfortable giving that

and it's actually Their Fear or their

their big sticking point was something

that's not so hard for me to to to give

on or maybe I could go out of my way to

give more even than they're than they're

they're expecting in that area and in

this other area I need something and

then they they're happy to give it and

so that's usually the the better way to

do it my my favorite question is what

would need to be true so it's like okay

you want to sell your business for $100

million what would need to be true for

me to pay $100 million for it and you

can just lay it out like like what would

make this a no-brainer and you can do

that in any situation and you know

sometimes it's impossible but oftentimes

it's far more possible than you think

when everyone actually lays that out

because usually there's some sticking

point that you don't realize or or or

you know it's something that is kind of

outside of the scope of things you've

already talked about and I'm always

amazed by how much that works that works

like as I've been fundraising it works

there like what would need to be true

for you to be like oh it's easy for to

give you money or um you know uh for for

a trip like what would need to be true

for everyone to be excited about going

on this trip like it's just such a good

question and it it really sets that up

as like let's collaborate on this that

was my pickup line what's a guy like me

got to do to be with a girl like you and

then she was like do you have a

friend what's his

name you have this other thing on here

where you talk about how um what do you

say uh a cold email is the most

asymmetrical trade um and that you've

actually cold emailed a bunch of people

there's one guy in particular who you

listed that I want to ask you about but

uh it sounds like the cold email has

done well for you explain

more yeah I think um it's funny I've

been saying this a lot more like

publicly into groups and stuff um

and it's still like if everyone called

email the ARB would go away but I think

it's just too scary or whatever that

people don't do it it's still a huge

opportunity I will say like the the

addendum to that advice is you got to

have the goods when you show up for the

meeting or the call or whatever I think

like I think I don't know maybe it's

just like anecdotally because I talk

about this a lot I get a lot of cold

Outreach and you also like the second

part is you got to be really good when

you show when you show up um but if

you're good uh when you show up up like

it's just this incredible incredible

kind of hidden secret which is there's

always a scarcity of talent like no

matter who you are and you know how much

money you're worth or whatever there's a

scarcity of really awesome people um and

so everyone has an infinite appetite to

meet people who are interesting talented

have a unique view on things whatever

and if you can present that like you you

will really kind of go a long way and

and the downside I can't even remember

I'm sure I've sent hundreds that have

been responded to I've never got a bad

response it's usually just no response

and I don't even remember the

non-responses but the ones that I've got

responses from have been amazing you

know and so I think um I definitely

think more people should do it

especially if you're young or you're a

student that that alone can be enough of

a hook um that like most people will

meet with a student if they seem

switched on and and interested and yeah

I I'm still amazed that people people

don't do it but I've started to see

people do it and then they show up and

like they don't have anything to say or

they don't have questions for verett or

whatever and that can be really bad we

already know your first deal but that

was the first one but I want to know

first deal worst deal best deal weirdest

deal it's like the [ __ ] murder Mary

of uh what we did we did first deal

dribble which might also be best deal uh

what's what's the worst deal that comes

to mind what's the big mistake you made

the worst deal and name names and list

their email address and social media

handles yeah the the worst deal is

actually the one that I can say the

least of about which should indicate how

bad of a deal it was the abstract wor

yeah the the the worst one was just that

uh the person was dishonest and I should

have known and I didn't and I ignored it

for for greed reasons uh because I was

just thought this was such a good deal I

could look past these things when you

say I should have known I ignored it

what what are some things people could

look out for what what can I learn from

that yeah it was it was not this deal

but there was um a friend of mine uh who

buys some types of companies did a did a

deal where they flew in the uh the

founders to meet them in person and the

first night the founders wanted to know

where they could get drugs and you know

that is like in of itself is not a

strong signal but in that context in

that situation it's like kind of what

more do you need to know and it turned

out that they were doing a bunch of

stuff that they didn't disclose or

whatever it's always stuff like that

like someone who's really flashy is

almost always a bad sign um all these

little things and you know even like in

the casee of this deal I introduced the

person to a bunch of different uh

friends and and you know um experts and

they were all like this guy is really

something you know like you I don't

really know why you're dealing with this

person and it's it is funny how you just

get the blinders on when something is so

good and I think we've all all made that

mistake um and so yeah that that one it

just turned out that there was a bunch

of things that we didn't know about and

it went very badly and we lost all our

money it was a really small small check

fortunately that was like the one upside

but um that one was was pretty pretty

rough um what's the most unique or weird

deal the the best

one I mean it's kind of too early to

tell one one one that I really I really

really love is this company called meal

lime it's a um meal planning app that

tiny bought in 2018 meal planning made

easy so four four four and a half

million people it says on the website

use this app and what do you do use say

uh what ingredients you have and it

gives you like uh a bunch of recipes to

cook and lines them out for breakfast

lunch and dinner but it was just this

really awesome app and it was made by

this really amazing technical guy who

had just built this really great product

like I remember the the moment that sold

me is like they you know how the iPhone

turns off when you put it close to your

head um he realized that you could use

that sensor if your hands are dirty

while you're cooking you could wave your

hands over that sensor to like go to the

next part of the recipe or stuff all

just these little things and they have

these huge butterfly flexs like turns

out when you do that Apple thinks that's

really cool and then they feature you in

the App Store and like you there's all

these small details um and we bought

that business and it grew a lot we got

all of our money back in the first

couple of years and then this was the

only business tiny as um as sold to date

that uh we so we a ma two major grocery

retailers came along and I guess like in

a boardroom somewhere they had just

decided you know we need an app um and

so they both became interested and it

was kind of funny because um I you know

the company that I was at before tiny we

had sold the company to workday and it

was a pretty difficult um uh experience

and so I kind of viewed it as like my

chance to get another go at selling a

company to a public business and really

kind of it was going to be my turn to

like get a good deal and um and then we

sold it we sold it for you know a huge

Revenue multiple made a lot of money you

know up excess of 25 times of our money

and um and it's still today it's like if

you look up it's still used it's this

great thing I think the original team is

still there they were very happy with

the outcome um I just love that because

it was like it was this kind of perfect

little situation and this great little

almost like um like craft app like just

someone who cared a lot about making

great product and and I love those and

the weirdest deal it was basically this

company a big Fortune 500 tech company

bought a business and the business had

two business units and the big Fortune

500 only wanted one of those

units and um they basically had to

divest of it very quickly and so we were

able to buy it for it was doing $10

million of recurring revenue and it was

shrinking the business was shrinking

because it was built on top of another

platform that was becoming less popular

over time and um and we were basically

able to buy it for so little that we

borrowed all the money and then paid

back the loan in like three or four

months and so we basically got it for

free we were able to we bought this out

of the tiny fund and we we could write

this great update to our investors

saying hey uh you know we didn't call

any Capital but you now own this new

business we're going to do a

distribution soon and it was like small

dollars but it's cool to pay nothing for

a business um and then the interesting

part is like we also got a domain that's

probably worth a million or two million

dollars depending on how fast we wanted

to sell it and so it was kind of this

like fun little deal of like can you

actually do a business for can you buy a

company for no money down and um you

know it won't be a business it will not

be a 20 a and it's not going to grow for

10 years but we'll make many multiples

of our money on it um and it's fun like

in the actual fun statement that like

KPMG does they have to list the cost and

so the the accountants uh listed as like

a $36 cost basis which is I guess like

the actual money that went into the deal

and um those are cool like you can be

really really creative you don't have to

put a lot of money down how did they

find you or you them we in that case we

knew a board member um and it was the

situation where again we made a bid

there and they didn't like the bid and

they went and tried and shopped it

around and turns out like there's a very

limited set of buyers for that kind of

thing and especially ones who can do a

deal really really fast um and so it was

kind of this we understood why we had

the right to win this this deal we

understood that money was not the most

important thing here um and so we were

able to get it for this this great price

that's it for part one we actually kept

talking to Jeremy and it was so good

that we're going to turn it into a

two-parter the second part is actually

all about what he would do today so the

first part was kind of like how they how

they built tiny the deals the lessons

learned that was the past and now I

asked them basically if I was going to

do tiny today what would I do what deals

would you be looking at what businesses

do you think are great buys what

opportunities do you see and he tells us

the single best investment opportunity

he sees today in this next part uh enjoy

that's coming out tomorrow

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