Andrew Wilkinson and Tiny Capital

https://colinkeeley.com/blog/andrew-wilkinson-tiny-capital-operating-manual

by colinkeeley • 6 years ago

82 16 6 years ago

meredydd• 6 years ago

These two threads seem contradictory to me:

1> For the employees, [post-acquisition] is business as usual for the most part. The goal is for the employees to not even notice.

2> You can buy companies and replace expensive people with a global remote workforce that is just as good (or better) and cheaper.

Can someone with more knowledge or experience of Tiny acquisitions explain which of these is true? Are they a holding company for SaaS companies with extra best practices, or a cuddly face on traditional PE cost-cutting tactics? The article itself doesn't seem sure. (And, oddly, appears not to notice the contradiction.)

marban• 6 years ago

Short version: I'd say their goal is to build a Berkshire equivalent consisting of businesses that are in for the long-run with a calculable revenue model that requires little to no OP costs.

jjoonathan2• 6 years ago

Yeah, those and half a dozen other admissions of the usual PE tactics. The article makes it abundantly clear that it's a cuddly face on traditional vulture capitalism.

The only way for it to be anything else would be for the article to be wrong and for the firm to ignore their incentives. Seems unlikely.

Sevii• 6 years ago

I’ve experienced something similar where after the acquisition nothing really changed for current employees but most new hires were in the Mexico office.

jjoonathan2• 6 years ago

Inflated self-image? Check.

Tiny is positioned as the good guys of private equity. The Berkshire Hathway of internet businesses.

Usual PE shenanigans? Check.

A challenge with this model is that it is difficult to acquire tech companies at reasonable prices.
Often Tiny buys product or designer-led startups that have grown organically. They will raise prices and put standard best-practice marketing and sales processes in place.
Canadian arbitrage includes lower salaries, not needing to pay medical benefits, SRED, and cheaper currency.
“Let someone else run the marathon and incentivize them.”

nothal• 6 years ago

good guys

If you're laying off good workers who ostensibly helped build a company you run from the ground up, you're actually a vulture and I think most people would probably agree your job is immoral.

neonate• 6 years ago

able to charge San Francisco agency rates and only pay Victoria, Canada wages

guytpearson1• 6 years ago

Edited for clarity: I disagree with this model. There.

dang2• 6 years ago

I’ll be downvoted into oblivion but Andrew is so cringe.

Yeah, please don't post comments that break the site guidelines. You did that twice in ten words here, and there's nothing else in the comment.

Maybe you don't owe the person who is "so cringe" better, but you owe this community better if you're posting to it.

https://news.ycombinator.com/newsguidelines.html

evek• 6 years ago

I remember visiting designernews often, a community from their portfolio, for robust and interesting discussions, before the acquisition. Through time it became stale, now it looks empty. I wonder what's the success rate for this kind of investment strategy.

dang2• 6 years ago

Sort of interesting to look back: https://news.ycombinator.com/item?id=5091763

There were a few other threads: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

seibelj• 6 years ago

I agree that delegation is the key to scale. Letting go of things and trusting other people is very hard to do, and the flip side is knowing when things are going wrong and making the decision to step back in. An art form.

troughway• 6 years ago

Speaking of.. there's also this twitter roll - https://twitter.com/awilkinson/status/1258424937716436992

drchiu• 6 years ago

Andrew Wilkinson is someone I've heard of (see his tweets across my timeline every few days), and so his signal gets boosted a lot in trendier tech circles.

Another Canadian company ("Berkshire Hathaway" of software) is Constellation Software. $3.1 billion in revenue in 2019 and is publicly traded [1]. They too are interested in buying SAAS companies and internet properties. I didn't hear about them until I came across it randomly (again on Twitter).

Does anyone know if there's a compiled list of these kinds of operations (software holding co's / Berkshires of SAAS type of thing)?

[1] https://web.tmxmoney.com/quote.php?locale=en&qm_symbol=CSU

porter• 6 years ago

The Constellation CEO also writes an annual letter that is packed with useful information, just like Buffet except for SaaS.

jakozaur• 6 years ago

Tiny Capital seems to take advantage of three principles:

1. Market of VC chasing next unicorns is very comoetitive. Chasing smaller opportunities is underserved.

2. Selling smaller companies is tough. A lot of founders enjoy freedom more than maximizing financial outcome.

3. There are efficiencies at scale that can be applied across portfolio. E.g. remote hiring.

Andrew Wilkinson and Tiny Capital

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