The Art Of Waiting

Andrew Pierno

Jun 16, 2023 — 4 min read

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Feeling poetic. apologies in advance. Also speaking of waiting, my Linkedin account got suspended at 10k followers ... not sure what I violated this time but very glad to also be building this newsletter. Platform risk is stressful.

There's a prevalent myth that success in business is simply a function of incessant action; a game of speed where the swiftest player seizes the spoils. Decision velocity, speed, move fast break things. These are all tweetables I grew up on. Sometimes they're even true. Particularly in winner-takes-all markets. It can also be true early in a tech cycle (like how Jasper was early with the explosion of LLM activity)

However, today let's explore a different narrative. We've found one of our most valuable tools isn't always busyness, but strategic patience. We call it the Art of Waiting.

The Power in Pause

When the business world is revolving at the speed of innovation, the notion of waiting may seem counterintuitive. But that's where the power lives. Waiting is a choice, a conscious decision to allow time and context to refine our opportunities. It’s not about inaction, but the recognition that time can reveal clarity, solidify decision-making, and ultimately add value.

We will sometimes send an offer, hear back in about 30 seconds that it's a "hell no". A kind "fuck off", only to hear back three weeks later that 2 buyers fell through etc, etc, and would we be interested in our original deal? Sometimes it's yes, sometimes it's no, but the key was patience. We evaluated a deal, sent over a number we felt comfortable with, and then waited.

Patience in Acquisition

Waiting gives us the breathing room to look a little deeper at the other bets we could make. We need to understand not just the company's financials, but also its technology, market positioning, competitive landscape, and our potential for growing it. Notice I did not say the company's growth potential. We are a team with a certain skill set. I don't think we can grow anything, nor do I think we should try. But we can and have grown the things we have bought, and there's a patience to our success there. Make bets, let them play out, adjust.

With a limited amount of capital, we are only going to be able to make so many bets before either reaching a compounding velocity that allows us to do additional acquisitions in a given year, or raise a fund. We've regularly gone months without buying anything. Right before all this LLM stuff exploded we didn't see anything we liked.

The Magic of Compounding

The art of waiting is also central to our philosophy of holding. As is often said, "time in the market beats timing the market." We buy these little guys with the belief that they can grow and create value over time. If you zoom out, we only need to be directionally correct, not hugely and immediately correct. That means we can sleep well at night on a 2-3% MoM growth rate. Would we like it to be higher? Of course, but we don't need it to be.

A deal that looks like garbage in 12 months, looks amazing in 48 months. If we mess up on a deal, we can always just wait. Wait to sell. Wait to recoup our $. Wait to do that redesign.

When we give our portfolio companies time to evolve, we're tapping into the magic of compounding.

Try thinking in years, not months. But in those two years, a modest 3% month over month results in doubling the MRR. The company you see today could be radically transformed tomorrow, achieving feats that would have seemed impossible if rushed. Some things just need time.

At a 3% MoM growth rate, you double in 2 years

P.S. If you've never doubled your $$ on an investment, try it. You'll be as stoked as we are on consistent, predictable, profitable growth.

Building Relationships

Waiting, furthermore, is crucial in building relationships and a brand. People are just starting to recommend deals to us because they read or heard of another founder we bought something from and they had a good experience. There's something called advertising which promises to accelerate this, and sometimes it does, but it also works just as well to build your brand one brick at a time.

Remember, patience is not the inability to act; it's the ability to act wisely. And in this fast-paced world, the art of waiting could be the game-changer you never knew you needed.