My Worst Investment Ever Podcast Justus Hammer - Good Idea Versus Wrong Timing
BIO: Justus Hammer is the Group CEO and Co-founder of Mad Paws. Over the past two years, he has invested in over 45 startups. He has served as an advisor and early investor in Airtasker and a founding investor and advisor to VICE Golf.
STORY: Justus developed an idea to make real estate buying easier. He wanted to expand outside of Australia when COVID hit. Justus took a pause, thinking that the market would tank further. Instead, property prices doubled in the next 18 months.
LEARNING: What works in one asset class will not necessarily work in another. The real estate market dynamics are very different in each market. Timing matters, but you can never really know whether your timing is right until after.
“I don’t think there is a single truth or strategy that works for everyone. Just think about it and ask yourself what you want to achieve and what the most likely scenario is for you to get there.”
Justus Hammer
Guest profile
Justus Hammer is the Group CEO and Co-founder of Mad Paws. He has invested in over 45 startups over the past two years, serving as an advisor and early investor to Airtasker and a founding investor and advisor to VICE Golf. He has not only been involved in starting more than ten companies in the tech space, like Spreets and Mad Paws, but has also developed a growing interest in cash flow businesses over the past ten years.
Worst investment ever
Justus saw a big opportunity in the real estate space to improve and make purchasing a property easier. There’s a whole lot of angst that goes with that, and many people are very scared about the process and sometimes get it wrong. So, Justus and his company wanted to create a better way to get buyers from property A into property B.
They spent time building the idea and even had some of Australia’s biggest real estate companies backing them. In the beginning, the company was working and managed to transact around 40 properties.
But it was a tough time in Australia’s real estate market, so Justus ran into many issues. One particular issue was timing. The market was going down, so they had to buy properties, try to improve them, and sell them quickly.
They also ran into the problem of not being aggressive enough on the buying side, so they couldn’t get many properties. Still, they made money on about 60 or 70% of their properties. But they also had a couple that really killed them.
Justus believed the market would improve, so they sat through it. The market kept dropping, and they started looking for other opportunities. They began to look closer into the numbers, the unit economics, and what had been working. They realized the model was working pretty well outside Australia.
His company decided to expand into Europe, but before they did, COVID hit. COVID changed the dynamics completely. Debt facility providers pulled back and refused to give them a loan. Their real estate partners decided to figure out the situation first, believing the market value would go down. The market turned out to be the opposite, and property prices doubled in the next 18 months.
Lessons learned
- What works in one asset class will not necessarily work in another.
- The real estate market dynamics are very different in the US, Europe, and Australia.
- You can’t have regrets in investing. You’ve got to take the good and the bad.
- There isn’t a single truth or strategy that works for everyone.
Andrew’s takeaways
- Timing matters, but you can never really know whether your timing is right until after.
- Transferring a business model doesn’t always work.
- Investing is going to be a roller coaster, no matter what. It’s really a matter of holding on through the tough times.
Actionable advice
Justus underscores the value of pursuing activities that provide non-monetary benefits. He advises finding a balance between doing what you’re good at and what brings you joy. This advice serves as a guiding light, helping the audience navigate the complex terrain of work-life balance and personal fulfillment.
Justus’s recommendations
Justus recommends reading Atomic Habits to find structure and make your life easier. He also recommends The Subtle Art of Not Giving a F*ck if you want to focus on what matters and reducing suffering.
No.1 goal for the next 12 months
Justus’s number one goal for the next 12 months is to get Mad Paws to a better position and to invest in cash-flow businesses.
Parting words
“You’ve got to take some risk, but ensure you measure it as much as possible.”
Justus Hammer
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Connect with Justus Hammer
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- The Become a Better Investor Community
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- FVMR Investing: Quantamental Investing Across the World
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
- Achieve Your Goals