My First Million• Nov 7, 2025• 1:18:32Interview

I Own 38 Businesses. Here's What Actually Makes Money.

From My First Million

Andrew Wilkinson•Co-founder, Tiny

Executive Summary

Andrew Wilkinson, founder of the holding company Tiny, provides a comprehensive tier-list ranking of various business models, from freelancing and agencies to SaaS and permanent capital vehicles.
He expresses a bearish outlook on the SaaS industry, predicting a 'bloodbath' of competition due to the rise of LLMs, which has led his firm to reject most SaaS acquisition opportunities over the past year.
Wilkinson details his own journey, from starting the highly profitable design agency Metalab to pivoting to a Buffett-inspired model of acquiring and holding 'wonderful' internet businesses with his company, Tiny.
The discussion contrasts different investment philosophies, championing the long-term, permanent capital approach of figures like Warren Buffett over the high-risk, low-success-rate model of angel investing for the average person.

9 quotes

Concerns Raised

The rise of LLMs will commoditize many SaaS businesses, leading to a 'bloodbath' of competition.
Agency models are inherently volatile ('feast or famine') and suffer from high client concentration risk.
Angel investing is a poor choice for most individuals, akin to playing roulette.
Many popular 'buy a local business' models are actually just 'buying a job' rather than a scalable asset.

Opportunities Identified

Acquiring and holding profitable internet businesses with strong, defensible moats (e.g., hardware integration).
Utilizing permanent capital vehicles for long-term compounding, similar to Berkshire Hathaway.
Making contrarian investments in unpopular but vital sectors like defense technology.

Key Themes

Business Model Tier List

The episode is framed around a tier-list ranking of different business models (MLM, freelancing, agency, SaaS, marketplaces, etc.). Wilkinson evaluates each model based on scalability, lifestyle impact, and the median success case, rather than outlier examples.

This framework provides a practical and experience-based guide for entrepreneurs and investors to assess the inherent strengths and weaknesses of various business structures before committing time and capital.

The 'Wonderful Business' Philosophy

Drawing inspiration from Warren Buffett, Wilkinson advocates for buying and holding profitable, simple, and durable businesses. This philosophy is the foundation of his holding company, Tiny, which was seeded with just $4-5 million and grew by acquiring businesses rather than starting them from scratch.

This theme highlights a less glamorous but potentially more reliable path to wealth creation that contrasts with the high-risk, high-burn culture of venture-backed startups, emphasizing profitability and long-term compounding.

AI's Impact on SaaS

A significant portion of the discussion focuses on the threat Large Language Models (LLMs) pose to the Software-as-a-Service industry. Wilkinson argues that AI will dramatically increase competition and commoditize many existing SaaS products, making moats harder to defend.

This is a critical, forward-looking perspective for tech investors and founders, suggesting that future SaaS success will depend heavily on deep, defensible moats, such as hardware integration or unique network effects, that AI cannot easily replicate.

The Agency Business Paradox

Despite his design agency Metalab generating hundreds of millions in profit, Wilkinson ranks the agency model as a 'C' tier. He describes it as a volatile, 'feast or famine' business plagued by lumpy revenue and significant client concentration risk.

This provides a sober, insider's look at a common business model, cautioning that even immense financial success doesn't negate the operational headaches and inherent instability, pushing founders to consider more scalable and predictable models.

Contrarian Investing vs. Herd Mentality

The episode highlights the value of contrarian thinking in investing, citing examples like Founders Fund's early bets on Bitcoin and defense tech company Anduril when they were unpopular. This is contrasted with the widespread failure rate of angel investing, which Wilkinson likens to gambling for most individuals.

This theme underscores the importance of independent thought and due diligence in investment, suggesting that the greatest opportunities often lie in overlooked or unpopular sectors that the majority of investors are avoiding.

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