Aaron Levie, founder of Box, recently shared an investment insight so simple, it’s almost contrarian: stop chasing market noise and look at your own company’s expense sheet. On My First Million, Levie and host Sam Parr discussed how your P&L can be a roadmap to high-performing tech stocks, a strategy Parr calls “investing in your P&L.”

Key Takeaways

  • Forget expensive market research; your internal tech stack's expense line items are a live, real-world signal for investment opportunities.
  • Levie pointed out that if you had simply invested in Box’s core tech suppliers over 20 years – like Seagate, Western Digital, or SanDisk – “that portfolio alone would have you know, you would have every every index.”
  • Sam Parr personally funneled e-commerce profits into Shopify and its underlying stack, making more from those investments than from his core business itself.
  • The preference of your own engineers for a particular tool is a powerful, early indicator of future market leaders, often long before public investors catch on.

The Method: Investing in Your P&L

Imagine your company’s profit and loss statement isn't just a record of spending, but a secret map to investment opportunities. That's the core idea here. Sam Parr calls it "investing in your P&L" because you're literally using your operational expenses as a filter for top tech performers.

The premise is simple: your company pays for tools and services that are genuinely good. Your engineers and product teams actively choose and stick with software, hardware, and infrastructure providers because they deliver real value. These aren't abstract market predictions; they're daily operational choices backed by real budgets.

Aaron Levie brought this to life with Box's history. He noted, “If you just looked at probably even our own tech stack over 20 years and you just you just bought the stocks of what our tech stack represented like that portfolio alone would be you know you would have you would have every every index.” He specifically mentioned companies like Seagate, Western Digital, and SanDisk – the bedrock suppliers for Box’s data storage needs over decades. These weren't flashy, speculative bets, but critical tools Box depended on. Their sustained operational value translated directly into long-term shareholder returns.

Parr offered his own concrete example: he took profits from his e-commerce ventures and directly invested them into Shopify. “I just funneled all the profits into Shopify and the underlying like e-commerce stack and I've done great. I made more money there than I did in the the actual business itself.” The insight is that if your business relies on a tool to thrive, there's a good chance many other businesses do too, signaling a robust market leader.

This method taps into the often-overlooked wisdom of engineers. Levie explained, “Most of the best practices are just well known by engineers very quickly.” They’re on the front lines, testing, implementing, and adopting the best solutions. Their choices become a powerful leading indicator, far more specific than generic industry trends.

Where This Breaks Down

This strategy isn't a silver bullet. For starters, it only works if your company is actively using and adopting leading-edge tech. If your organization is stuck on legacy systems or isn't innovating, your P&L might just reflect outdated expenses, not future market leaders. Second, it's a long-term play, as Levie's 20-year example with Box illustrates. You're betting on sustained operational excellence, not quick market fluctuations. This means your capital will be tied up, and short-term volatility might be significant. Finally, this method naturally leads to a concentrated portfolio. You're investing in a handful of companies you personally use, which can increase risk compared to a more diversified approach. You're effectively putting your eggs in the baskets that enable your own business.

What to Do With This

This week, pull your P&L for the last 12 months. Go line by line on your biggest tech expenses—SaaS subscriptions, cloud infrastructure, hardware suppliers, development tools. Identify any that are publicly traded companies. Don't just admire them; treat them as a "second P&L." If your internal teams are sticking with these tools, if they’re critical to your operations, it's a strong signal, and it's time to put your money where your engineers' preferences are. Make a concrete plan to allocate a portion of your investment capital to these long-term, operationally validated businesses.