Tiny Office Hours, Episode #2
How to Start a Holding Company, How to Hire and How to Incentivize Employees
April 12, 2021
Hosts: Andrew Wilkinson, Chris Sparling (Tiny)

Episode Overview

Andrew Wilkinson and Chris Sparling of Tiny Capital answer listener-submitted questions on entrepreneurship, holding company structures, hiring and incentivizing executives, agency vs product business dilemmas, and pragmatic business growth. The format is a live charity AMA; donations are matched by Tiny and given to local charities. The session is candid, practical, and full of personal experience, lessons learned, and highly actionable advice.

Key Discussion Points & Insights

I. Becoming a Tiny Foundation Fellow

Timestamp: [01:00]

• Context: Question about joining the Tiny Foundation as a fellow (philanthropic initiative).
• Andrew: Selection is personal—no formal application. Fellows are individuals the team knows, admires, and trusts.

  "What we're instead doing is just choosing people who we think are super smart and we admire a lot and we know personally and respect, and we're just saying, hey, you know, here's x hundred thousand dollars." – Andrew Wilkinson [01:17]

• Advice: Share your work directly; connections may still lead to funding or introductions.

II. What to Do with a Niche Music Production Website

Timestamp: [02:36]

• Site history: 9M page views, declining revenue, considering pivot to a Dribble/Unsplash or subscription model.
• Andrew: Do the math—analyze conversion rates and competitive landscape carefully before pivoting or investing heavily.

  "I think this is probably a math problem." – Andrew Wilkinson [03:44]

• Chris: The space is “tremendously competitive,” and cash flow should be preserved unless the economics justify a risky bet.

  “I would just let it cash flow as it is right now and maybe focus on something else.” – Chris [05:12]

• Andrew: Selling as-is is possible but the value depends on passion and risk appetite.

III. Agency vs. Product Company – Division of Focus

Timestamp: [06:10]

• Scenario: Two founders running an agency and a SaaS product; agency funds some SaaS development but only 1% of revenues.
• Chris: Strong recommendation to bifurcate—completely separate the ventures and talent rather than “incubate” product within the agency.

  “I found over and over just bifurcating and taking on that added expense…is the best path forward. And it's the anti synergy approach almost.” – Chris [08:03]

• Andrew: Personal experience shows mixed teams lose momentum; fully separate teams/leadership are best. Also, selling agencies is hard if founders want to exit; buyers usually require long earnouts.

  “The ultimate form of delegation is hiring a CEO and just being on the board.” – Andrew Wilkinson [41:31]

IV. Founder Departure vs. Operator Hires

Timestamp: [11:23]

• Andrew: Some founders excel at starting, but new leaders can unlock latent potential if culture and values align. Replacing founders is “organ transplant”, and getting the right “organ” is critical.

  “It's like doing organ transplant, right? You're doing brain surgery and often the body will reject the new organ.” – Andrew Wilkinson [12:56]

• Key trait for operators: “Gumption and scrappiness” focusing on "8020"—delivering results with minimal effort by picking base hits first.
• Chris: Look for those decisive early; first 3 months reveal true CEO quality.

  “Perfect is the enemy of good. They don't succumb to analysis paralysis.” – Chris [13:58]

V. How to Hire Executives and CEOs

Timestamp: [15:24]

• Andrew: Early-day hires were based on proximity; luck and risk.
• For new roles, especially COO/CEO, “pay up” for talent from larger, respected companies. Use recruiters to widen the funnel; background checks are essential.

  “It's very easy to hire someone who's a dingus because you don't know what to look for.” – Andrew Wilkinson [16:23]

• Chris: “Build scar tissue”—it may take multiple hires to find the right one. Don’t rush; make incentives a core part of the package to alter behavior.

VI. Incentivizing Executives Without Equity

Timestamp: [45:13]

• Andrew: Use a hurdle model for profit-based incentive; executives earn above a baseline growth threshold. Adjust over time if growth slows.

  “So if your business is naturally growing at...150% a year, you could say anything beyond...you're going to get part of your bonus payout, and then you're going to get massive ratchets as you increase that.” – Andrew Wilkinson [45:13]

• Chris: Only works if executive has real control; misaligned benchmarks can spark disputes.

VII. The Agency CEO: How to Find and What to Look For

Timestamp: [29:01]

• Chris: Poach from larger agencies; do not be quick to title someone CEO—promote based on fit/performance over time.
• Andrew: Typical path is multiple hires before finding the right person; sales background is invaluable.

  “In almost every core new type of business ... we've gone through multiple people in almost every role before we nail it.” – Andrew Wilkinson [30:15]

• Structure compensation as 50% base, 50% performance-based; high incentive drives energy and results.

VIII. Should You Start Your Own Agency or Get a Job?

Timestamp: [35:43]

• Andrew: Start where you want to end up. Don’t overthink—just contact people you admire, offer value, get that first client, and iterate.

  “If you want to work for yourself, go work for yourself." – Andrew Wilkinson [36:03]

• Chris: You'll regret not trying; expand your network and act.

IX. Investigative Journalism via Capital Daily

Timestamp: [38:23]

• Started as a news roundup for local Victoria news; graduated to investigative journalism as scale (and funding potential) increased.

  “Start with the roundup...then you can layer in the other stuff.” – Andrew Wilkinson [41:14]

X. Building a Holding Company

Timestamp: [41:14]

• Andrew: Holding company structure suits their personality and stage; must be comfortable being hands-off and delegating to CEOs.

  “We always like to say that the ultimate form of delegation is hiring a CEO and just being on the board.” – Andrew Wilkinson [41:31]

• Chris: Most entrepreneurs with multiple companies are already running a holding company—question is how centralized/decentralized it should be.

  “Are you like a General Electric...or are you the Berkshire Hathaway, which is more of the approach we've taken where everything is verticalized?” – Chris [42:55]

XI. Scout System Explained

Timestamp: [53:19]

• Referral incentives offered for deal leads: scouts earn a percentage of any referred business acquisition Tiny closes, potentially substantial.

XII. Miscellaneous Advice & Memorable Quotes

• On learning to be a good operator: “Build scar tissue, just getting out there and really starting to learn from what happened.” – Chris [48:19]
• Strategic laziness: “You need to be like a Gore Tex for tasks, right? So nothing should stick to you. You should repel water or repel tasks.” – Andrew Wilkinson [49:01]
• On product/agency math: “At the end of the day, this stuff comes back to the math of SaaS.” – Andrew Wilkinson [52:06]
• On taking risks in venture-backed/trendy markets: “It's the equivalent of trying to invade the United States. When you're Fiji and ... you're going up against...aircraft carriers.” – Andrew Wilkinson [24:11]

Notable Quotes

• “Perfect is the enemy of good. They don't succumb to analysis paralysis.” – Chris [13:58]
• “You have to be comfortable being hands off.” – Andrew Wilkinson [41:31]
• “Start where you want to end up.” – Andrew Wilkinson [36:03]
• “If you want to work for yourself, go work for yourself." – Andrew Wilkinson [36:03]
• "[At the end] the CEO’s job is simply to be a leader, to set vision, to set mission and values ... and to really hire the right people." – Andrew Wilkinson [49:01]

Timestamps for Key Segments

• Becoming a Tiny Foundation Fellow – [01:00]
• Music Affiliate Website Advice – [02:36]
• Agency vs. Product Business Dilemma – [06:10]
• Hiring Executives (COO, CEO) – [15:24]
• Incentivizing Executives Without Equity – [45:13]
• Holding Company Structure Discussion – [41:14]
• On Starting Young and Overcoming Paralysis – [35:43]
• The Scout System – [53:19]

Tone & Atmosphere

• Candid, practical, sometimes self-deprecating (“Fiji invading the United States …with speedboats” [24:11]), supportive of experimentation and learning through mistakes.
• Strong emphasis on decision-making frameworks, “math over hope”, and strategic laziness/delegation.

This episode is ideal for founders and operators wrestling with growth, hiring, and structural decisions in agencies, SaaS, and holding companies. The hosts blend high-level perspective with tactical stories and advice—pulling few punches about failures and lessons learned.