When it comes to achieving entrepreneurial success and building significant wealth, many people are drawn to the allure of founding or investing in the next multi-billion-dollar startup. However, the story of Andrew Wilkinson, the visionary behind TINY, demonstrates a different path—a path that involves going small to get big. In this article, we delve into Wilkinson's remarkable journey, exploring his operational process, fundraising strategies, team-building techniques, and the timeline leading up to taking his business public.
What is TINY?
TINY is not your typical tech startup; it's a long-term holding company for internet businesses founded by Andrew Wilkinson and Chris Sparling. TINY specializes in acquiring "profitable, simple, and often boring" internet businesses, taking majority or whole stakes in them. This approach may not be as glamorous or as quick as launching a groundbreaking startup, but as Wilkinson believes, it's a dependable way to accumulate substantial wealth.
The Road Less Traveled: Going Small
Starting companies can be exhilarating, but it's also a lot of hard work. Wilkinson recognized that buying established businesses with existing cash flow was an underrated and more predictable path to building wealth. He understood that it is often easier to purchase and improve enterprises than to start them from scratch.
A Capital Journey: Self-Funded and Profit-Driven
Wilkinson's journey began in 2006 when, at 19 years old, he founded MetaLab, a design agency in Victoria, British Columbia, Canada. In its first year, MetaLab generated $250,000 in revenue with an impressive 50% profit margin. Over time, Wilkinson's commitment to growth paid off, with MetaLab consistently expanding. By 2020, the company had reached approximately $20 million in revenue.
However, Wilkinson wasn't content with design alone. He ventured into launching SaaS businesses but encountered setbacks, which led him to use MetaLab's profits to acquire various companies starting in 2016. These acquisitions eventually formed the foundation of TINY, which Wilkinson wholly owns in partnership with Chris Sparling. TINY is now entirely self-funded, a testament to Wilkinson's commitment to operational excellence and profit-driven growth.
From Small to Not-So-Tiny: Going Public in 2023
Wilkinson's vision and strategic acquisitions transformed TINY into a conglomerate of businesses, encompassing software, technology, media, and more. The company recently achieved a significant milestone by going public in 2023, attaining a billion-dollar valuation. In 2022, TINY reported approximately $50 million in profits, marking a remarkable achievement from its humble beginnings.
The TINY Portfolio: Diverse and Profitable
TINY's portfolio comprises approximately 40 wholly owned businesses, with three major companies leading the way:
MetaLab: With revenues ranging from $40 to $50 million and profits around $20 million, MetaLab serves as the cash flow engine of the entire TINY empire.
Dribbble: Often described as the "GitHub for designers," Dribbble was acquired for a modest $5-10 million. Today, it generates tens of millions in annual revenue.
WeCommerce: Specializing in Shopify apps, WeCommerce has become a key player in the Shopify ecosystem.
The TINY Acquisition Criteria: What They Look For
TINY's success lies in its acquisition strategy, which focuses on profitable, simple, and high-margin internet businesses. The criteria for TINY acquisitions include:
- 3-5+ years of operating history
- Profits of at least $500,000 per year, potentially as high as $15 million
- A high-quality team in place
- Flexibility regarding owner involvement
- Simple internet businesses with competitive advantages
Wilkinson often refers to these businesses as "New Zealand companies"—quietly thriving and self-sufficient, far from the turmoil of tech giants.
The TINY Model: From Services to Marketplaces
TINY's portfolio is as diverse as it is extensive, ranging from agencies and SaaS tools to physical products, communities, media, job boards, and digital goods marketplaces. This variety exemplifies Wilkinson's adaptability and willingness to explore different niches.
Hands-Off Ownership and Delegation
Wilkinson acknowledges that his strengths lie in focusing intensely on problems for short periods, making quick decisions, and excelling in the 0-to-1 phase. He describes himself as "inch deep and a mile wide" and admits he isn't suited for day-to-day execution.
The key to TINY's operational success is delegation. Wilkinson understands the importance of letting go and empowering CEOs to run their businesses independently. He emphasizes that the owner's role is to provide support and resources while allowing CEOs the autonomy to make decisions.
Empowering CEOs: Compensation and Autonomy
TINY offers competitive compensation packages to attract top CEO talent. Variable compensation tied to performance ensures that CEOs are motivated to drive growth and exceed benchmarks. TINY's CEOs typically receive a mix of base salary and variable bonuses, with the potential for significant earnings based on exceptional performance.
Operational Freedom with Boundaries
CEOs running TINY-owned companies are given considerable autonomy, but certain boundaries exist to ensure responsible management. These boundaries include financial controls, such as requiring board approval for contracts exceeding a certain threshold, and oversight to prevent long-term leases or other commitments that may negatively impact the business.
The TINY Community and the Berkshire Hathaway of Internet Businesses
TINY has earned a reputation as the "good guys" of private equity. Wilkinson is often referred to as the "Warren Buffett of the internet," and TINY's straightforward and efficient acquisition process has garnered respect in the industry.
Entrepreneurs looking to sell their businesses are attracted to TINY's reputation for transparency and its ability to provide a smooth transition. Wilkinson values ease of process and aims to make acquisitions swift and straightforward.
The Future of Going Small to Get Big
Wilkinson's journey from a small agency to taking a company public with TINY is a testament to the power of strategic diversification, profit-driven growth, and the willingness to delegate. His story serves as an inspiration and a blueprint for entrepreneurs looking to build wealth through well-executed operational processes and a commitment to going small to get big ultimately.
As Andrew Wilkinson continues to lead TINY into new frontiers, entrepreneurs can learn from his journey—embracing the notion that success in business doesn't always come from the grand and flashy but from the steady accumulation of profitable ventures and a commitment to operational excellence.
Placing A $600M Bet On Yourself with Chelsea Mandel
➡️Help a fellow entrepreneur level up by forwarding this email.
➡️Let us know what you think of our content: Feedback
How did you like today's email?
Let us know what you think so we can continue to improve: