My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
Service-to-Product Acquisition Strategy
Using profits from a service business to systematically acquire better businesses with recurring revenue and product characteristics.
How It Works
Service businesses generate cash but have limited scalability. Use that cash flow to buy businesses with better unit economics, recurring revenue, and less labor intensity.
Components
Build profitable service business first
Resist typical agency expansion (fancy offices, more staff)
Identify acquisition targets with recurring revenue
Use service profits to fund acquisitions
Gradually shift portfolio toward product businesses
When to Use
When you have a profitable service business generating consistent cash flow but want to reduce dependency on labor and improve margins.
When Not to Use
If your service business is still growing rapidly or you lack operational experience in acquisitions.
Anti-Patterns to Avoid
Example
“Andrew Wilkinson's Metalab design agency generated profits that funded acquiring software companies like Dribbble, building a portfolio less dependent on billable hours.”
Related Knowledge
Acquire and turn around distressed luxury brands
Transformed brand with luxury margins (75%+), global distribution, and sustainable competitive moat
Build trusted business relationships entirely through digital interactions
Trusted business partnerships conducting significant transactions without ever meeting in person
fail_fast_misinterpretation
Brand as Moat Strategy
Using brand power as a primary competitive moat instead of technology or network effects, particularly effective in luxury goods where perception drives value.
Correct Lesson Learning Framework
A systematic approach to evaluate whether someone is drawing the correct conclusions from their experiences, rather than just having experiences.
Diagnostic Authority Model
When you can diagnose a problem for someone, you gain more authority and sales leverage than if they already know they h