July 5, 2024 • 59min
How I Made My First $1M - The Andrew Wilkinson Story
My First Million
Key Takeaways
- Andrew Wilkinson went from making $6.50/hour as a barista to becoming a millionaire in just 4 years by starting a web design agency
- He identified 4 key "levels" in his journey to wealth:
- Going from employee to self-employed freelancer
- Transitioning from self-employed to boss/agency owner
- Incubating multiple businesses and making first big exit
- Taking company public and reaching "end goal" financially
- Making more money didn't necessarily lead to more happiness - Andrew found the "weight of money" and isolation that came with wealth to be challenging
- He recommends entrepreneurs focus on reaching "enough" (financial independence) rather than chasing billionaire status
- Andrew suggests a framework of: 1) Launchpad ($250k/year passive income), 2) Enough (target net worth for financial freedom), 3) Life's Work (finding meaning beyond money)
- Starting a "boring" cash-flowing business and selling it can be a more reliable path to wealth than high-risk startups
- There's value in pursuing what you love directly rather than deferring it to chase money first
Introduction
In this episode of My First Million, Sam Parr and Shaan Puri interview Andrew Wilkinson, co-founder of Tiny Capital. Andrew shares his journey from working as a $6.50/hour barista to becoming a millionaire in just 4 years by starting a web design agency. He discusses the key inflection points in building wealth, his experiences with angel investing and acquiring companies, and his evolving perspective on the relationship between money and happiness. Andrew also talks about his new book "Never Enough" which explores many of these themes.
Topics Discussed
Andrew's Journey from Barista to Millionaire (00:50)
Andrew describes how he went from being a barista making $6.50/hour to earning $60/hour as a freelance web designer within a short period:
- Observed two web designers who would come to the coffee shop daily
- Learned they made $500 per website by cold pitching businesses
- Bought a book on web design and started pitching his services
- Quickly quit his barista job to pursue web design full-time
Andrew reflects: "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 for like, it was fun."
The Four Levels of Andrew's Wealth Journey (01:47)
Andrew outlines four key "levels" he experienced on his path to wealth:
1. Employee to Self-Employed
- Transitioned from $6.50/hour barista to $60/hour freelance web designer
- First big project was $2,000 for 5 days of work ($2,600 CAD)
2. Self-Employed to Boss
- Started outsourcing work to others, making profit on the spread
- Read "The E-Myth" and started thinking of business as a machine
- Grew agency to dozen employees, making over $1M/year personally by age 22-23
3. Incubating Businesses
- Started multiple businesses including e-commerce, restaurant, software
- Many failed, losing up to $10M on one venture
- First big win was selling Pixel Union for $7M at age 27
4. Taking Company Public
- Reached "end goal" financially with tens of millions in bank
- Realized money didn't solve anxiety or relationship issues
Lessons from Angel Investing (26:13)
Andrew shares his experiences and perspective on angel investing:
- Has invested $25-30M total in angel deals over the years
- Doesn't closely track performance, treats it more like "roulette"
- Contrasts angel investing (roulette) with buying/operating businesses (poker)
- Wishes he had invested more in boring assets like real estate for diversification
Andrew reflects: "Angel investing is, frankly, a roulette table. You're just having fun, and it's fun to be able to say, you know, oh, I gave this entrepreneur who ended up building this great company 25 grand along the way. But I've realized it's a lot more kind of soulless than playing poker."
The Weight of Wealth and Happiness (32:15)
Andrew discusses reaching his financial "end goal" but finding it didn't solve core issues:
- Still experienced anxiety and relationship conflicts despite wealth
- Found the "weight of money" to be isolating and stressful
- Realized overshooting financial goals can be a mistake
Andrew shares: "I think what surprised me was the weight of the money, right? So, you know, we. I wrote this in the prep doc, but, like, this question of, like, do you really need to be a billionaire, or do you want to be a billionaire but you want it to be? I wanted to be. I always wanted to be because I didn't have enough money. Growing up, money was a four letter word in our house, right? My parents fought about money all the time. And so in my weird little anxious child brain, I said, okay, I want as much money as possible. If I have a lot of money, then everyone will stop fighting. And I think what was counterintuitive is that it didn't, it didn't cause that."
Framework for Financial Goals (36:42)
Andrew outlines his recommended framework for entrepreneurs to approach wealth-building:
- Launchpad: Achieve $250k/year passive income
- Enough: Determine your target net worth for financial freedom
- Life's Work: Discover meaningful pursuits beyond money
He suggests $60M liquid net worth as a reasonable "enough" target for most:
- Allows spending $3-4M per year comfortably
- Provides buffer for luxuries like private travel
Rethinking the Path to Wealth (44:50)
The hosts and Andrew discuss alternative perspectives on building wealth:
- Starting a "boring" cash-flowing business can be more reliable than high-risk startups
- Many pursue venture-backed startups without realizing low odds of success
- Book recommendation: "How to Get Rich" by Felix Dennis
- There's value in pursuing what you love directly vs deferring for money
Shaan shares a story of advice he received: "I don't believe in the deferred life plan. He goes, anytime. You know, he's like, I'm older and wiser. He's like, you know, I just, if I ever hear somebody who wants to do something, and then they give me a bunch of reasons why they're not just going and doing it right now, it tends to be a bad decision to not go do the thing you want to do."
Andrew's Book "Never Enough" (54:00)
Andrew discusses his new book "Never Enough" which explores many themes from his wealth journey:
- Officially releases July 9th
- Includes stories of meeting Charlie Munger, selling/buying back Pixel Union
- Aims to share lessons learned about the pursuit of wealth
Conclusion
Andrew Wilkinson's journey from barista to millionaire entrepreneur offers valuable insights for aspiring business owners. His framework of "Launchpad, Enough, Life's Work" provides a thoughtful approach to building wealth with purpose. The discussion highlights that while financial success can provide freedom and opportunities, it doesn't automatically lead to happiness or solve core life challenges. There's wisdom in pursuing work you love directly rather than deferring it, and in being mindful of "enough" rather than chasing ever-increasing wealth. Ultimately, Andrew's story and new book "Never Enough" serve as both inspiration and caution for those on the entrepreneurial path.