Alan Li
1.5K posts
Shopify brings native B2B features to millions more merchants shopify.com/news/b2b-for-a… via @Shopify
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TBPN has been acquired by OpenAI!
The show is staying the same and we’ll continue to go live at 11am pacific every weekday.
This is a full circle moment for me as I’ve worked with @sama for well over a decade. He funded my first company in 2013. Then helped us fix a serious logjam during a critical funding round a few years later. When I took my second company through YC, he was president at the time, and then when I joined Founders Fund, the first deal I saw in motion was the post-ChatGPT round in late 2022. And as we started growing TBPN last year, he was the very first lab lead to join the show.
Thank you to everyone that has been a part of TBPN until now. The last year has been the most fun and rewarding part of my career and we’re excited to have more resources than ever going forward.
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Alan Li がリツイート
Really impressed with how Chloe and Pink handled this
Pop Crave@PopCrave
Olympic snowboarder Chloe Kim confuses P!nk with Kelly Clarkson: “Growing up, when I was like 12... I loved listening to your music... Like 'What doesn't kill you makes you...'
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@alanliberkeley Thanks for clarifying! It's hereby added as a planned feature request. You can track it here: kleio.featurebase.app/p/import-shopi… 🙋🏻♂️
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Yesterday I told you I was scared shitless. Today I'm just speechless.
76 new stores signed up for Kleio in the last 24 hours. I've replied to over ~100 comments on my last post, and every single one has been kind and encouraging. Not a single troll. Not one.
It feels surreal. I built this thing alone, and yesterday it felt like the entire DTC community showed up at once.
I think I finally understand Shopify's "Arm the rebels." I never really liked that phrase. But that's what this feels like — arming the store owners who don't want to pay thousands of dollars a month for an analytics app. I get that frustration because I've been on the other side of the table for 10 years as a DTC brand owner — and still am. I still run 2 stores myself. Kleio exists because I needed it first.
So thank you. Seriously. I don't take a single signup for granted ❤️
Mathias Schrøder@MattiSchroder
I should be celebrating. Instead, I'm scared shitless. A $54M/year store just signed up for Kleio. 16 others signed up today (so far). My mentions won't stop. And right now it feels like things are moving faster than I can keep up with. Kleio is my first public-facing app. I built it alone. Apparently, imposter syndrome doesn't go away — it scales with the numbers. When your biggest customer does $500K, you worry a little. When they do $54M/year and your signup notifications won't stop, you start stress-testing everything at 9:30 PM wondering what you missed. My honest fear? That I've missed something that'll break at the worst possible time. That they'll realize a solo dev is behind the curtain and walk. Or that a big name finds a bug, tweets about it, and the momentum reverses overnight. I'm extremely proud of what I've built. Really, really, proud. I use Kleio every day to run my own stores and genuinely love using it. And I know I'll fix whatever breaks — I have so far. But it still just feels surreal. Anyway. Back to fixing bugs before anyone notices. 😂
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@MattiSchroder Amazing! Re: 2 it’s for people purchasing their labels directly on Shopify.
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@alanliberkeley Thanks, man! Appreciate it! 🙌🏻
1. Pinterest is coming is coming. You can track the feature by voting on the feature on the roadmap.
2. This is new to me! How does Shopify know shipping costs?
3. Same as 1! Coming very soon.
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Alan Li がリツイート
Autostep uncovers repetitive tasks ready for AI. Then builds or finds the agents to solve them.
Your team repeats the same work hundreds of times a week. No one notices. Autostep does.
Congrats on the launch, @aidan__pratt!
ycombinator.com/launches/PYq-a…
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We offered 5 people a Porsche 911 GT3 RS if they could get @WisprFlow to make a mistake
It's the fastest and most accurate AI voice dictation app that's 3x more accurate than ChatGPT, Claude, or Siri.
Today, we’re finally launching on Android. Download now: play.google.com/store/apps/det…
As a part of the launch, we’re giving away 6 months of Wispr Flow Pro for free.
Like, retweet and comment ‘Wispr Flow’ to get it. Enjoy.
— Written with Wispr Flow
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Alan Li がリツイート
Alan Li がリツイート
Alan Li がリツイート
Everyone suddenly wants to “buy a small business” and it is a terrible idea
Usually HVAC, plumbing, roofing, etc.
Usually 80% debt and with a personal guarantee
Here’s why the numbers don’t work once you move from Excel to cash:
Hypothetical Setup:
- Revenue = $2M
- Industry average gross margin = ~45% ($900K) gross profit
- Operating expenses (SG&A, admin, insurance, etc.) = $600K
- EBITDA = $300K (15%)
Purchase Price:
- Price = $1.5M (5x EBITDA)
- 80% financed = $1.2M debt, $300K cash equity
Debt Service:
- $1.2M loan at 10% interest, 7-year amortization = ~$246K annual payment
- EBITDA $300K – $246K = $54K pre-tax, pre-CapEx, pre-working capital
- If you pay yourself a ~$200K salary, cash flow = ($146K)
Debt Service Coverage Ratio:
- $300K ÷ $246K = ~1.22x before CapEx and taxes,
but after reinvestment and your salary, coverage < ~0.3x
CapEx & Maintenance:
- 3 service trucks at ~$50K each, 7-year life = ~$21K/year
- Equipment, software, tools, uniforms, insurance, facilities = ~$30 – 40K/year
- Annual maintenance CapEx = $60K
Working Capital:
- AR average 45 days, AP 30 days = ~15-day gap
- 15/365 * $2.0M = ~$82K of operating float required
Free Cash Flow Walk:
EBITDA $300K
– CapEx $60K
– ΔNWC $80K
– Debt service $246K
= ($86K pre-tax), pre-owner draw
Even before paying yourself, you’re cash-negative
Sensitivity Analysis:
- 2% margin compression on $2M revenue = ~($40K) hit
- 5% material inflation on COGS (~$1.1M) = ~($55K) hit
- 10% revenue dip at 45% gross margin = ~($90K) hit to gross profit
Combined = ~($185K) reduction to EBITDA, now ~$115K
Free cash flow = $115K – $60K – $80K – $246K = ~($271K)
Return on equity:
- You invested $300K cash
- At best you break even in year 1
- At worst, you lose ~($271K) and still owe $1.2M personally
- That’s near-zero to negative ROE in practice, with full recourse risk
Cash Reality:
- Suppliers want payment every Friday
- Customers pay 30 – 60 days out (if you are lucky)
- Bank drafts monthly
- Payroll never stops
Your “ownership” income isn’t leveraged equity, it’s subordinated cash flow
The Myth: “Buy a boring business and get rich”
The Math:
- You bought a $2M revenue job with gross margin volatility, thin EBITDA, high leverage, and personal recourse
- You didn’t escape the W-2
- You created one with negative working capital and a personal guarantee
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Alan Li がリツイート
Chubbies has done over $100M so far this year, increasing EBITDA margin > 50% YoY. Your classic overnight success that took 14 years. One of the many things they do so well to continually drive balanced, profitable growth where margins can * increase * over time is follow the 95/5 rule as well as any brand I’ve seen.
However, for the first 5 years, I basically did the exact opposite of what the rule says. My loss is your gain, so here are:
1) Three things I learned about the 95/5 rule
2) Three ways you can update your thinking on the topic
3) Three things you can do about this right now
let's do it.
** Three things I learned about the 95/5 rule **
1. Only 5% of the people who see your content on a daily basis (AKA your potential buyers) are in-market to buy right now. That means 95% of the buyers you reach are out-of-market and won’t buy for months or even years.
2. And, nope, no matter how awesome your direct response offer is, you cannot persuade the buyer to go in-market because they already have what you’re selling and won’t need a newer version any time soon. We don’t move buyers in-market – buyers move themselves in-market based on their needs.
3. All the direct-response conversion-focused dollars we spend are only relevant to the 5% of folks. This was especially humbling when realizing that ~95% of our spend allocation went to direct response (see reference above re: doing the exact opposite).
** Three ways you can update your thinking on the topic **
1. Our goal is to increase the probability that the brand comes to mind when the buyer goes in-market, NOT to persuade the buyer to go in market. You can’t push buyers down a funnel, but you can, to quote Professor Jenni Romaniuk, “catch buyers as they fall”.
2. ""People largely use their memories when buying, rather than searching. Simply put, the brand that gets remembered is the brand that gets bought."" - John Dawes of the Ehrenberg-Bass Institute
3. Since marketing works by influencing future buyers, think about developing creative that gets noticed and gets remembered -- gives you permission to be bold, put on a show and have a little fun.
** Three things you can do about it right now **
1. Since we've all been so focused on optimizing the hell out of how we convert the 5%, we need to reacquaint ourselves with the 95%. Walk a day in the shoes of the 95% to develop the empathy needed to effectively speak to that person.
2. Put together a plan to gradually shift your marketing investments to match the reality of the 95/5 rule. It could take all of 2024. No need to rush.
3. Take a day with your team. Remove all meetings. From a blank slate, think about what it means to do things that get remembered, that get noticed. What does it mean for your brand to be bold, to put on a show, and to have a little bit of fun?
enjoy
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Looking for places to keep up to date with retail / brick and mortar businesses
What are some good accounts or websites I should know about?
@alanliberkeley maybe you know any?
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i like the @blackbird app, but your search functionality is terrible!
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The percentage of US adults who say they drink alcohol has plummeted to 54%, the lowest in the history of a Gallup poll that goes back nearly 90 years.
bilello.blog/newsletter
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