What running a business taught me about markets

September 2026

I spent years at Baillie Gifford modelling how businesses work from the outside. Then I built one, and learned more about markets in two years than the modelling taught me. You see the mechanisms directly instead of inferring them.

Money

Funding a small business is a different game from allocating a fund's money. You find out what cost of capital means when it's your own savings and a bank loan on the line. A model does not teach you that.

Take our SEIS application. We went for advance assurance and put real work in, most of it on one HMRC distinction: leasing assets out is an excluded activity, selling an experience isn't, and we had to prove we were the second kind. A round of queries came back. Somewhere in the middle of it we worked out that equity carried the higher long-term cost, decided we'd rather back ourselves and fund the growth with debt, and moved on. The rejection landed afterwards anyway. By then it barely mattered.

The lesson that stuck is that cash is everything. Profit on paper isn't money in the bank, and a growing business can run out of cash precisely because it's growing. You read a balance sheet very differently once you've come close to that yourself.

Scaling

Going from one site to several is where the economics get interesting. Most of your costs don't fall just because a site is small, so sub-scale locations lose money and operators walk away. I got round that by giving the people running each site real ownership of it and cutting out a layer of middle management. Small sites started to pay. That is operating leverage, and you spot it in a company's accounts far quicker once you have built it yourself.

Automation

The same applies to AI. I built the systems that run the back office and designed myself out of the day to day. A fixed cost base shrinking while output holds is exactly what the market is trying to price into companies right now. I've watched the small version happen from the inside, so I can usually tell which of those claims are real and which are slideware.

The payoff for investing

All of it feeds back into how I read a business. Unit economics, working capital, what management can actually control against what the market hands them, why a handful of firms scale and most never do. I knew these as concepts. Now I have lived them. There is nothing like actually running and growing a business to sharpen your understanding of stocks and economic processes.

I have been through the ups and downs and I know how much these things mean. I do both now, invest and operate.

I advise on markets and capital allocation, and on putting AI to work in business. me@yussefrobinson.uk