This weekend, I listened to an interview that Jeff Bezos, founder of Amazon.com and Blue Origin, recently gave. I haven’t found many long-form Bezos interviews, so I was interested in hearing what he had to say in this one, which lasted over two hours.

Bezos discussed many topics, but one thing he mentioned multiple times stuck out to me. Bezos is a big fan of wandering.

His thinking is that solving a problem by inventing a new solution means you don’t know where you’re going. New solutions are different than incremental improvement, and there is no linear path to new solutions like there is to incremental improvements. The solution isn’t clear, and you’re working to find it through all sorts of unexpected twists and turns. The process is often seems inefficient, but that’s how new solutions are invented.  

Bezos went on to say that he likes messy meetings accompanied by a crisp document outlining the problem to solve because messy meetings allow for the wandering that results in the invention of new solutions.

Bezos also shared a fun fact: when he wakes up in the morning, he isn’t as productive as people think. He first wanders a bit by drinking coffee, talking with others, reading the news, etc.

The interview with Bezos was interesting, and I had a few great takeaways. If you’d like to watch the full interview, go here. For his thoughts on wandering, go here, here, and here.

I recently met with an idea-stage entrepreneur. He’s built an MVP of his solution and is thinking about ways to scale the solution. At his early stage, he’s testing and tinkering a surprising amount.

During our conversation, I realized he’s clear on the solution but hasn’t crystallized the problem he’s solving. This means he’s not sure who his customers are, either. His solution addresses a few potential problems, and he’s considering a wide variety of businesses as potential customers. He’s holding his solution tight and the problem it solves loosely.

This is the classic solution-in-search-of-a-problem approach that some idea-stage entrepreneurs unwittingly take. This approach has landed this entrepreneur in a gray area where he’s unsure what steps to take next.

At the idea stage there isn’t much to undo, so there’s a simple remedy for being in a gray area. Simply flip the approach. Let go of the solution and zero in on a specific problem. Said differently, hold a problem tight and be flexible on the solution that solves it.

I suggested that this founder consider pausing work on his solution and doing discovery of potential customer groups about the problems he thinks his solution could solve. I suggested he read The Mom Test and follow the customer discovery methodology outlined in the book to identify the specific problem he wants to solve and develop a deep understanding of it. Hopefully, that will put him in a position to build a great solution that solves a painful problem customers will happily pay for—and keep him out of the gray area he’s in now.

I recently had the chance to meet Tobi Lütke, CEO and cofounder of Shopify. Shopify’s platform provides technology that allows retailers to easily sell online. Said differently, it makes e-commerce easy. Tobi initially built Shopify to solve a personal pain point but soon realized that other entrepreneurs were experiencing the same problem. In 2004, he embarked on solving the problem for others, and as of the writing of this post, Shopify is a publicly traded company with a market capitalization (i.e., valuation) of just under $100 billion.

Last fiscal year, Shopify recorded $5.6 billion in annual revenue. The Shopify platform processed almost $200 billion in gross merchandise value (GMV); i.e., revenue on behalf of its customers. Tobi has built a company that’s having a large impact on how commerce is done.

Tobi is one of those rare founders with the ability to take a company from idea to billions. I was interested in learning what trait allowed him to achieve such a rare feat. Tobi shared a variety of valuable insights, but what stuck with me most was his conviction about the power of entrepreneurship. Tobi believes entrepreneurship is a powerful force that can change the lives of those who pursue it. He’s expressing that belief through Shopify’s mission of helping people achieve economic independence by making it easier to start, run, and grow a business. And his belief and mission-oriented mindset have likely been a significant driving factor in his ability to continuously level himself up as Shopify has grown from an idea to an international company generating billions of dollars in annual revenue.

I’m glad I had the opportunity to meet Tobi, and I look forward to following his entrepreneurial journey. I can’t wait to see where he takes Shopify next and the impact it has on entrepreneurship.

At a recent event, I met an entrepreneur in the real estate space. I love learning about company origin stories, so I asked for his. He said that after the Global Financial Crisis, his financial services career was uncertain because no Wall Street banks were hiring. In fact, many were firing employees and trying to stay afloat. He used his relationships with his previous banking customers and his curiosity to learn about a real estate problem that others were unaware of. He researched the space for over two years and then launched his company.

I love his story because it demonstrates how focus, creativity, and drive can help entrepreneurs do their best work, even in the worst of circumstances.

I caught up with an entrepreneur friend considering his next thing. He sold his first company and wants to buy a company he can optimize for cash flow. The dilemma he’s working through now is what size company to buy.

If he buys a company that’s over $1 million in annual EBITDA, the multiple paid on EBITDA will be higher. Translation: it will be a much more expensive purchase price, and the yield on the investment likely will be lower than he would like. On the other hand, the company will likely have more people with institutional knowledge of how the business operates. That will minimize the chances of the business rapidly declining if the CEO transitions out. The purchase price will be higher and the yield could be lower, but the business is more likely to run on its own without much intervention from my friend. He could be a passive owner.

If he buys a company with less than $1 million in annual EBITDA, it’s the opposite. The multiple will be lower and the potential yield higher. But there’s key-man risk. The CEO is likely the glue holding it all together. My friend will likely have to become CEO or work closely with the CEO so he can learn the business and minimize the chances of a rapid decline if a CEO transition happens. The purchase price is lower and the yield may be higher, but my friend will likely need to be a very active owner.

Both approaches have pros and cons. I’m curious to see which path my friend chooses.

I recently had a conversation with an entrepreneur who’s started several successful businesses in various industries. He was telling me about the latest company he’s working on. It’s a waste management space, and the company will remove trash from residential homes. He doesn’t have experience in this industry, so how did he decide to start this, I wondered. The story was that he heard from a friend about the opportunity to obtain a contract (i.e., recurring revenue), investigated it, and decided it could be profitable. He went to work finding a cofounder and developing a strategy to execute the work.

During our chat, I realized a few things:

• This isn’t a space this founder is passionate about; he just saw an opportunity he couldn’t pass up. 
• He isn’t planning to scale this company. He just wants to have a few reliable customers and build a small, reliable team to execute the work.
• This is a small (and tough) market, so there isn’t an opportunity to create large amounts of value for others and recognize that value through appreciation of the company's value. Rather, it’s an opportunity to create a steady stream of cash flow by providing a service that people don’t want to do, but also don’t highly value.

During my conversation with this entrepreneur, I realized something. Some entrepreneurs are gifted at creating small companies that essentially exist to generate cash flow for the owner. And they do this repeatedly. They’re great at taking a company from zero to one—to getting the machine started—but rarely think about the problem’s market size or how big the company could be. They focus on getting the company to the point where it can distribute a certain amount of cash to them, and when it does, they’re happy. The idea of reinvesting cash into growth opportunities to scale the company doesn’t cross their mind and doesn’t interest them when it’s brought to their attention. 

I think of these gifted people as serial cash-flow entrepreneurs.

I chatted with an aspiring founder recently. He’s a senior software engineer at a start-up valued at a few billion dollars. He’s been there for several years. He joined when they were a team of one hundred—it’s now one thousand. His equity is fully vested, and he’s excited about leaving to start his own company.

He’s currently in search of the problem he wants to solve. He’s investigated a few problems and done discovery, but none panned out. He’s also looking for someone to join him. Specifically, he’s been looking for someone technical. This stuck out to me, and I asked why. His response was simple: I want to be CEO and need someone to build the product.

As we chatted, I shared my learnings as (1) a nontechnical founder who regretted not having a technical cofounder and (2) an investor who’s talked with countless aspiring nontechnical founders who deeply understand a problem and have an idea of how to solve it but lack the technical skills necessary to build a solution:

• The problem is where it all starts. The more painful it is and the more people who experience the pain, the better. If you haven’t found the problem you want to solve, there’s nothing wrong with listening to the problems other aspiring founders want to solve. Nontechnical aspiring founders with deep understanding of a problem (i.e., founder–market fit) are always looking to connect with aspiring technical founders.
• Building a team best suited to solve a particular problem is the goal. Great team members have complementary, not overlapping, skills. Hiring people to do what you don’t want to do will likely lead to overlapping skills and team gaps (in his situation, great technical abilities but no deep understanding of a problem—or no problem at all).
• Titles don’t mean much in early-stage companies and often change. Having the CEO title is great for the ego, but it isn’t worth missing out on solving a great problem or working with a strong team.

These points resonated with this aspiring founder. He’d recently realized he was limiting his cofounder prospects by focusing only on people with technical skills and had been thinking about changing his approach. What I said about my experience confirmed some of what he was already thinking. 

This founder is super smart and has the drive to build an amazing business. I can’t wait to see where his entrepreneurial journey takes him!

I love talking shop with entrepreneurs. Today I was at a social gathering where an established entrepreneur told me about his approach to acquiring new customers. He runs his business out of Atlanta, but there’s heavy competition (i.e., low margins) in Atlanta. He’s from a smaller city three hours from Atlanta. The people in that community don’t have access to the caliber of products his company sells. They’re used to paying top dollar for low to medium quality and driving an hour to do so.

He devised a simple marketing strategy. He’s an alum and former athlete at the local high, so he sponsors the football and basketball teams. His company logo is painted on the football field, and every time the home team scores, the announcer reminds the fans that his company backs the team. He bought the scoreboard for the basketball team with his logo displayed front and center. His goal is to stay top of mind with the people in the community, and it works. When they’re ready to buy, they think of him. He makes the sales process electronic, simple, and smooth. He arranges for purchases to be delivered to their door. They get a better product at a fair price and support a business that supports the community. This strategy is highly effective. He gets a steady stream of customers from this low-tech approach, and his average cost to acquire a customer is ridiculously low.   

What this entrepreneur realized was that there’s an underserved customer niche that he understands better than most. He focuses narrowly on them. He markets to them in a way that resonates with them and that has the dual benefit of doing good in the community. He made the sales process something they could do from their home, which they weren’t used to. The end result is that he’s built a thriving business and is the market leader in that city using a very low-tech and inexpensive marketing and sales strategy.

I like to keep my finger on the pulse of new technologies and emerging trends, but it’s easier said than done. One of the ways I do it is by catching up with early-stage founders who are building in that space. The founders in the early days of launching a company are typically as close to ground level as you can get. They’re usually hands on keyboard and in the weeds of everything. Hearing how they’re applying new technologies and what positives and negatives they’ve experienced helps me understand things from a practical perspective. I also try to make sure these conversations are bidirectional by providing feedback on anything that’s on the top of their mind (that I can help with).

I’ve found that this is a great approach to staying abreast of new things and maintaining relationships with and giving back to early founders.

I recently had a conversation with an aspiring entrepreneur. He wanted my thoughts on a company he was considering starting in a space I’m familiar with. During our chat, I learned that he’d been an early employee at a tech start-up and stayed for several years. That company recently sold for a few billion dollars. His equity as one of the first few employees gave him a financial windfall. Because he was on board so early, he worked closely with the CEO for several years, and they still talk regularly. The CEO encouraged him to start a new company and offered to back him once he settles on an idea.

I love to hear stories like this. An early employee is part of a company that turns out to be a massive win. He gets a significant financial reward. Seeing his former CEO’s journey firsthand makes him want to take the same journey. And he already has the backing of his former CEO, who knows his drive and worth ethic.

These are the kind of stories that, when repeated, lead to a city having a thriving start-up ecosystem. We need more stories like this!