#260 Investor's dilemma #2

In this episode, I continue my discussion about investing and share
a personal experience of trying to partner with a passionate team
years ago. I invested in a recording studio, but quickly learned
that passion alone isn’t enough. The people I worked with weren’t
ready to take on the responsibility of being entrepreneurs, and the
project fizzled out when I wasn’t around to push it forward. The
lesson? Entrepreneurs need to have skin in the game, whether
through time, effort, or capital, to truly succeed. The second big
insight I share is about leverage. If I’m going to invest in a
business, it needs to be in an industry where I have experience and
knowledge—whether it’s SaaS, lead generation, or building
communities. That way, I can add real value without having to learn
everything from scratch. Investing in businesses that align with my
expertise means I can maximize my contribution and ensure long-term
success. Transcription: Hello everybody, it’s me again, still here
in Yerevan, and I wanted to continue from the previous Investor’s
Dilemma episode. Something new came to mind that I had to share.
I’ve actually tried the approach of finding passionate people to
join their businesses, and let me tell you, it didn’t work out as I
had hoped. This goes back 20 years—well, maybe more like 15
years—when I was working in a corporation and making some good
money. Some of my friends, who were entrepreneurs, would come to me
with business ideas. I’d think, “Okay, I can gamble a little bit of
money on this.” One idea that really caught my attention was from a
friend who was a musician. He wanted to build a recording studio,
and as a business guy, I did my homework. It seemed like a solid
business idea. Beyond working with singers, the studio could offer
services like voiceover recordings for commercials, mastering
audio, and providing international audio engineering services
through platforms like Upwork. It seemed promising, so I invested
in the studio. But here’s the thing: I realized that not everyone
is cut out to be an entrepreneur. The passion was there when I was
around, but when I left, nothing happened. I quickly learned that
even if you give people the money, resources, and the opportunity,
some just aren’t ready to take action. It’s a skill set not
everyone has, and they need more than just financial backing—they
need real skin in the game. Looking back, I see that I could have
approached it differently. Maybe I should have offered them more
ownership to motivate them, or required them to put in some capital
or effort. But the lesson I took from this is that if you’re going
to join someone in their business, they need to already be making
progress on their own. I’m no longer interested in investing in
just ideas. I want to work with entrepreneurs who have already
proven they’re serious about their venture. If they’ve made
progress—whether it’s building an MVP, offering free trials, or
developing an established community—that’s when I’ll get involved.
The second big lesson was about leverage. If I’m going to invest,
it needs to be in something I already know a lot about. I don’t
want to spend time learning a whole new industry, like a restaurant
or a golf course. I’ve built up expertise in sales, SaaS, lead
generation, and building communities over the past decade. These
are the industries where I have leverage—where I know the
competitors, the tools, and the market inside and out. That’s where
I should be putting my money.