Transcription
I moved to San Francisco because I wanted to understand how these 20-year-olds built billion-dollar companies. I met a guy named Naval Ravikant. Remember, I was talking to him once about leverage. The best entrepreneurs have the biggest output for unit of time. Time multiplied by leverage equals output.
And this is what I learned. Naval taught me this. There are only four master skills to creating leverage. Once I understood this, I understood I only had four things to become world-class at, and I could have anything I want in my life.
Most entrepreneurs, when they're growing their business, it doesn't matter if it's their first $100K or $300K or million, they get to a place where growing is painful. And in that spot, they usually do one to three things. They either stall. Okay? They say to themselves, "This year I made more money last year than this year. I'd rather slow down, right?" And, um, and and just not grow. The problem with that is that the market's growing, right? Gross domestic product grows. Your customers will demand more from you this year than last year. And the, the worst part is your top people. If you don't create a future that's big enough for them, then they will go find somebody else who can do that. Does that make sense? Your dreams, right? This sounds like your dreams have to be bigger than everybody else on your team's dreams and goals. Write it down.
So that's step number two: sabotage. This one's fascinating. Some of you guys don't even know you're doing this. I have a friend of mine, Tracy. Business was going through some challenges, six months of hell. We've all been there. It's tough. And in that storm, Tracy tells herself, "I need to give myself a break." And she decides to take a four-week sabbatical. Do you think a company that's struggling, the CEO of the company should take a four-week sabbatical? Yes or yes? No. Perfect. You guys are on the same page. This is great. But she didn't realize she was sabotaging her success. She had opportunity to keep growing because when we're going through the worst, just so you know this, when we go through the worst, we're actually developing our skills to get to the next level. Huge. Okay? So understand when you're challenged, you should say, "Thank you, worthy opponent. This is going to shake me to become the person I need to become to get to the next level." Instead, Tracy went on sabbatical. She missed the opportunity to grow.
The third is sell. My buddy Jason calls me one day and he's like, "Hey man, I think I'm going to sell my company." He has an agency, $2 million in revenue, been doing it for about seven or eight years, and it just became really tough. And I said, "Jason, write down all the stuff that you don't like about your business today." And he made me a list. And I said, "If those things weren't true, would you sell the business?" He's like, "No." I said, "Well, let me invite you to consider a different perspective. I know you want to go do something else. You think the grass is greener. Here's what I know. You've just hit your new complexity ceiling. We all have them." Write down complexity ceiling. Complexity ceiling. Anytime it gets hard, I want you to look at that term. I said, "It doesn't matter if you solve it now or you leave and start something else, you will hit the same level of complexity where you decide I don't want to grow anymore. It's your pain line."
So what I want to share with you today are three strategies to overcome that pain line. The first principle that I want to share with you, and it's a universal principle, it's the buyback principle. We don't hire people to grow our business. We hire people to buy back our time. It's a calendar over a capacity strategy. See, most entrepreneurs, when they're growing, they go, "Well, now I need to hire another logo designer. I need to hire another real estate agent. I need to hire another, um, you know, electrician." And I would say, "No. You start with your calendar first." Because here's the deal: if you do the second, you get the first. But if you do the first, you definitely don't get the second. Most entrepreneurs get to about $1.2 million, about 12 employees, where their life starts to get really painful. That pain line is screaming at them every day because they violated this rule.
This is the framework. Draw this loop, okay? It's a loop. You need to go through these three steps to move forward. So every time I hit a pain line, okay? Today I own dozens of companies, and my calendar completely shifts two or three times a year. So I'm going to teach you the exact same thoughts of how I look at my calendar every time I hit my pain line.
First step is we got to audit. We got to audit our calendar for time and energy. It's not enough to just look at what we're doing that we could pay somebody else to do. It's what are we doing that sucks our energy? What I call green or red stuff. If we can replace that with green, we will transform our lives.
Then transfer is the ability to give what we're doing today, the work, to somebody else, but check this out, without taking any extra time, using the camcorder method.
And then the third, the problem with Phil is most people get to the first and second step and then they decide to do a four-hour work week. I ain't here to do a four-hour work week, okay? I'm here to teach you guys all how to create an empire. And that word might scare some of you. But let me share with you my definition of empire. You want to write this down: a life of unlimited creation. You never have to retire from a life of unlimited creation. You never have to retire from that. That is an empire.
If we fill properly that new found time, then we continue upward. If we don't know what to focus on when we find that extra time, then we will just repeat that cycle. And some of you guys have been in that spot. You grow, you go down, you grow, you go down. Maybe not you, maybe the people out there, maybe somebody you know out there, right? Up, down, up, down. They oscillate. If you follow the buyback loop, you'll continue to grow. And that's what we're here for today. Million-dollar companies were not built off $10 tasks. Write it down. This is math 101. There's not enough hours in the week for you to grow if you're doing $10 tasks. And we have a lot of mindset monsters and beliefs that just won't support us to actually scale.
The first key strategy I want to teach you about is the replacement ladder. So I want to ask everybody to write down, if you are starting from scratch today and you had the ability to hire your first employee, who would they be? Write down the answer. Who would you hire first? I want everybody to write it down. Who would you hire first?
That lower go. All right, we're going to start over here. I want to hear some answers. What do you guys got? Sales? Anybody else? What do we got? Copywriting? Cool. Sheet metal roofing? So somebody can do sheet metal roofing? Perfect. And anybody else? VA? Anybody else? Cold callers? Assistant? Anybody? Secretary? Recruiter? I love those. Here's, here's the fun part is, uh, I can tell the maturity of your business acumen by the hire. Yeah, they're versatile. And it's because I've been doing this for 25 years. There is a strategy that I learned from this guy, Richard Branson. Okay? Now, here's the cool thing about Richard. Richard's the billionaire. Every billionaire wants to be like. It's just true. He, whatever you think he is, how he is, is exactly who he is.
In 2016 or '15, I got a, I got a cold email from my buddy out of the blue. "Hey Dan, I'm getting together with Richard Branson in Verbier, Switzerland. Do you want to join?" Hmm. Let me look at my schedule. Yeah, clear. Of course, I want to join. Like, I grew up reading his books. It was so funny because it was, I got the email in May and I thought it was an April Fool's joke. But I'm like, it's May, it's not April. Like, and it honestly, it wasn't until I was in Switzerland at his house, aka lodge, 16 bedrooms, 20 staff, massive, in that living room, sitting on that couch, and Richard comes out from the back and actually comes in and says hi to everybody, blah, blah, blah, that I actually believed he was showing up. Like, you guys got to understand, you want to talk about imposter syndrome? It was so strong in that group of people. It was Tim Ferriss, the founder of Square. You guys know Brian Johnson, the Blueprint guy? Right now he's doing all those like weird life hacking stuff. He was there. He just sold Braintree for $600 million. And there's this Canadian kid that I got invited because some guy that invited to a dinner liked what I was building at the time and said, "You want to join?" And I was just like, "Dan, just don't say anything stupid. It's, you can only go downhill from here. You made it in the house. Don't get kicked out." So I just, I just shut up and paid attention. And I'll be honest, you all, what I was looking for, I wanted to understand how does a guy? Some of you may not realize this, Richard Branson has 400 companies in the Virgin Group of businesses. That Virgin Group of businesses that hold co has two CEOs. I wanted to understand how he thought about scale and leverage. And I just watched. I watched how he interacted with his staff. I watched how he manages time. And this is what I saw that I didn't expect at the time. I had a virtual assistant. I had assistants over the years, right? We've all had them. What was different was watching Richard. Essentially, anything that came into his life went through his assistant, Helen. And every morning for breakfast, they would sit there for 60 to 90 minutes, depending on what was on Helen's list. She would review only the things that she didn't know how to deal with, she didn't know how to route, she thought Richard would want to know about. And they just had breakfast. They talked. And then the rest of the day, he came skiing with us. That's how he ran 400 companies.
Do you guys want to learn the other stuff that I learned from Richard? Yes or yes? Perfect. This is the replacement ladder. We start at the bottom, we work our way up. Why? Let me tell you two different things. One, it's the lowest cost to pay somebody to do the work for the biggest time purchase back in your life, if you do it right. So that's why there's the outcomes. Level one, you might be feeling stuck in your business because you don't have somebody to support you on your account and your, in your admin work. But the key is to do like Richard did and give your inbox and calendar to your assistant. Some of you guys are getting a little, you guys, does that make you nervous? A little bit? Anybody? No, you guys are all good. Just giving up your inbox and your calendar to somebody else and letting them figure it out and hopefully you show up at the right meeting at the right time. Does that make you nervous? Anybody? Trust me, my assistant laughs all the time. She's like, "Dan, I could tell you to show up at the edge of a cliff and write in the description, 'Jump,' and you would do it." I go, "Well, don't do that." But I mean, I trust you. And it's because I realize that if I can give up the, the inbound. Your inbox is nothing more than a public to-do list of other people's goals on your time. Write that down. Your inbox, your email is nothing more than a public to-do list of other people's strangers' requests on your time. And you allow yourself to be addicted to that. So step one is admin.
Number two is your customer success, your fulfillment. This is where you have somebody that helps you. But the key is you got to give away your support and onboarding. So when I enroll somebody in any of my companies, okay, now I have CEOs that run them, but when I was doing it, the first, first hire after admin would be somebody to help me take the deal that I just closed and move it forward. In real estate, it's a transaction coordinator, right? Like you need somebody that'll, that'll work with the customer and do all the stuff. You can still be the specialist, but give that to somebody else.
Level three is marketing. Right now, you want to start building and designing a playbook to generate leads. Because if you don't do this, I'll tell you what happens. Sales is four because you, as a CEO, will always be able to sell better than anybody else you hire. And you know it. You know it. Some of you guys are world-class salespeople, 70, 80% win rates. Nobody's going to ever be able to to sell like that. And the challenge, if you hire too quick and you don't have the systems underneath, what happens in six months is you either fire them because they're not performing because they don't have enough reps and they don't have enough deals, or they quit because they're not making any money. Anybody resonate with that? Anybody have? Yeah, exactly. It's literally the six-month mark, depending how much they like you, four months if they, they like you, six months.
And the highest level is the ELT, write this down. Executive Leadership Team. Some of you guys call them leaders and managers. Here's my rule: Do they come with playbooks? Do they come with process? If you hire people or, or you know, promote people up that has no experience, then you're just creating more work for yourself. So when I say at that level, everybody else, the first hire in marketing, and those are all people you can hire, train, etcetera, because you're going to give them a playbook. When you start hiring leadership, they should come into the company with knowledge. Okay? That's the replacement ladder. And if you follow these five steps, some of my clients that I coach, they'll get there in 45 days. They see this, they go, "Got it," and they execute. Admin, free up their time. Sell, make revenue. Next hire, success. Business is starting to grow. They hire somebody to support the success. Buy back that time out of their calendar. Reinvest that now into marketing. They build a marketing strategy. They hire somebody to execute the strategy. Generates leads every day consistently. Then they hire, they do the sales. Then they hire a salesperson. That person comes in, goes through the scripts that they've built or the calls that they've already done, they've recorded, give it to the salesperson. Now they're coaching the team. So you can do this in 45 days, or some people are a bit slower, and they'll take years, right? Because they try to skip levels. You know what happens if you go straight to the top? How many people have you heard say, "I need to hire a COO"? You don't even have an executive admin. That's the silliest thing in the world. If you can't even work with your admin, you are not going to work with the COO. You need to start at the bottom and build the capacity and know how to move up. Here's my philosophy: If you don't have an assistant, you are one. I know it stings, right? I'm gonna, I'm gonna take the dagger and just a little bit more. The other parts of this is you're overpaid and you kind of suck. A great executive admin, they're worth their weight in gold. So if you don't have one, you are the person, and you're overpaid. You're not very good at your job.
So what do we do with that? I want to talk about leadership. And I'll tell you why I know CEOs and entrepreneurs are crazy. You guys agree? Yes or yes? We're nuts. Think about it. The reason why we're in business in the first place is because we're able to deal with a level of risk that most people would puke on themselves and pass out. Like, you do understand this? So just admit to it. And then try to develop the leadership skills and protect your team from you. Some of you guys expect your team to show up like you, and that's just silly. They aren't you. And if they were, guess what? They'd be building their own company. So what happens is the way we lead our teams have to shift.
So I moved to San Francisco in 2008. This is after selling my first company. I became a multi-millionaire at 27, and it crushed me. Like, I worked easily 100 hours a week for four years. First two companies failed. When I got out of rehab, tried my first company, failed after two years. Did another one at 21, failed after that. It wasn't until it was 24 that I gave it another shot. And my dad would beg me, even though I grew up and had a very colorful childhood, he would just beg me to get a normal job. It's like, "Dad, I can't do it. I'd rather, you know, as long as I'm not in prison and I didn't relapse, like, you should be really proud of me. Like, I'm doing something. I know I'm not making any money, but I think I'll figure it out." And it wasn't until I was, you know, almost in my early 30s that I figured it out.
So I moved to San Francisco because I wanted to understand how these 20-year-olds built billion-dollar companies. Does that ever make you wonder? These tech entrepreneurs you read about them on the news, like, how do they do this? How do they convince these old white guys to give them hundreds of millions of dollars to build these tech platforms to, you know, and they're like, barely old enough to drive? Like, it fascinated me. Just real talk, right? I grew up in the East Coast of Canada, so that world was foreign to me. Even though I was in software and I built a big company, that world was fascinating as an outsider. And I get there, and in the first few days, I get invited to a party. And I meet a guy named Naval Ravikant. This is 2008. Naval today has been on Joe Rogan. He's an incredible, like, just philosopher, honestly. But I met him earlier on, and he kind of became a, a mentor of mine. I, I call him one. He would never say that. But I share that because I remember I was talking to him once about leverage. So you got to understand, in business, the best entrepreneurs have the biggest output for unit of time. So if you think of the, the question, okay, write this down, okay? Time multiplied by leverage equals output. And output could be money, resources, etcetera. But time multiplied by leverage equals output.
So I want to ask you guys all a question: What are ways that we can create leverage? Write it down. If I say, "What are the tools to creating leverage?" Write it down. I want you guys to answer that. Just one idea. The number one tool for creating leverage is, is write down the answer. I want to hear from everybody. All right, let's hear from over here. What do you guys got? Raising money? 80/20? I like that. Anybody else? Social media? AI? Delegation? Yeah, leverage people. I like that. Anybody else? Automation? What else? What? I can't hear you. Systems? Ooh, I love systems. Do you know what systems stands for? Save yourself time, energy, and money. Write that down. Systems equals save yourself time, energy, and money. Here's the fun fact: everybody's answer was relatively correct. And this is what I learned. Naval taught me this. There's only four, I call them master skills to creating leverage, okay? Write these down. The four system, the four master skills are: Number one, capital. If I have money, I have incredible leverage. Okay? Takes money to make money. It really doesn't, but it takes resourcefulness. All you guys in this room have to be more resourceful. Okay? What do you guys need to be more resourceful? Doesn't take money, but money creates opportunity. Okay? So capital is one. Number two is code. Some of you guys said automation and AI, that fits in that bucket. Code, software. Three is content. Somebody's talked about, I think, podcast and social media content. I can create a system, an SOP, and it takes me an hour to create. And if I have 100 employees, that one system can train 100 people without extra effort from me. Does that make sense? Yes or yes? The fourth is collaboration. It's people. Okay? So the four Cs, write them down. Once I understood this, I understood I only had four things to become world-class at, and I could have anything I want in my life: code, capital, content, collaboration.
So specifically, I want to talk to you about how to lead people, the collaboration side. Most entrepreneurs go on the left side, transactional leadership. They tell people what to do, they check that they got it done, and then they, they tell them what to do next. That sounds pretty straightforward, yes or yes? Yeah. Everybody that's, I did that for 15 years. 15 years of starting companies at 17 till I finally made some money at 28. I mean, not 15, but a lot of, a lot of time. I just thought that's how you did it. The problem with that is around 10 to 12 direct reports, you wake up in the morning with all the piss and vinegar in the world. "I'm going to dominate the day. I've got my list of projects, and we're going to have a productive day." Anybody ever wake up that way? You're like, "I'm going to kill it today"? Yes. Okay. The first thing you do is you check your email, and there's fire, fire, fire, fire, crap. Then you think, "Oh, I wonder if Bob, Jade, Mary is is working on that right thing." So you start calling people on your team. You tell, "Hey, are you doing this? Are you doing that? Did you think of this?" And then there's like fires and issues and all that stuff. And it's not till 7:00 at night that you finally sit down to start doing the work. Anybody relate with that? Yeah. That's how it works if you have a half dozen people work for you. Anybody? And you tell them what to do, check what they got done, you tell them what to do next. This will become your reality. That's why I call it the pain line.
The opposite of that is transformational leadership. Okay? So I'm going to explain it to you, but I want you to think of an example in your life that's tough for you right now and apply this principle to that situation. That person. So the first thing, when I hire somebody, let's say my assistant, okay? The first day, I talked to her about a few principles. But the first one is, "You are the CEO of my inbox and calendar." Who's the CEO of my inbox and calendar? You are. My assistant. Exactly. And I, I don't mean to be a ding-dong, but I will actually ask her to repeat it back. "Who's the CEO?" "I'm the CEO." "Who's the CEO?" "I'm the CEO." "You're the CEO." Yay, yay. What does that mean? And I ask them to describe to me what does it mean to be the CEO of my inbox and calendar. Is it my responsibility to put stuff in my calendar or yours? Mine. Yay. We're winning. You know, like, it sounds foolish, but I'm trying to make it a little entertaining for all of you guys, keep you awake and focused. But I'm not, it's not that far off.
When I hire people, I look them in the eyes and I said, "I hired you to create this outcome. I don't tell them what to do. I hired you to create this outcome." And then I describe the outcome. So I got to tell them, "What does a 10 out of 10 look like?" My calendar has everything in there. It's structured. And the description is this: everybody's confirmed. Like, my, this is what a 10 out of 10. My, my travel schedule's figured out. All my flights are booked. International six weeks, domestic two weeks, whatever it is, right? And I get really clear at describing the mountaintop. That's the way I think about it. Some of us hire people and we don't think about telling them what it's going to look like at the mountaintop, right? We just say, "Hey, can you start climbing this mountain?" They're like, "Okay, where's, where's the path?" You're like, "I don't know. It's over there. It's in the corner." And they go over this way. They call you the next morning, "I couldn't find that path yesterday." I'm like, "What are you doing?" No, you say, "That's the mountaintop. See it right there? That's the mountaintop. You figure out how to get there. What resources would you need?"
So then we measure. Okay? So then I explain to the person I hired, I gave them the outcome. I said, "Here's how we're going to measure your progress." Every person in all my companies has a number. My social media person has a number. My CFO has a number. My COOs have a number. My CEOs have a number. They have one number. How many numbers? One number. Now, do they use other numbers to understand if they're making good decisions? Yes. But there's one number that we've all agreed on. If you're in the automotive space, the number is called the absorption. Absorption rate. I'm a software guy, and I know this stuff because I love, I love nerd, not on business. Absorption rate is the number that tells you the ratio of, of the service department and parts covering the overhead of the, the car dealership. And that number tells you how efficient it is. Okay? So there's different aspects into it. If I'm in the hotel space, it's the, uh, the average night of a room, you know, booking, right? That tells me how efficient the hotel is.
So once I tell my assistant the, the way I'm going to measure them, okay, which is response time. That's the number. How quick do you respond to people? Okay? And it's a simple tool. You put in your email, and they respond. Then when I have issues, somebody asked me this today, "What do you do when you have issues with people on your team?" Anybody else run into that? Issues with people on your team? There are humans. They're supposed to have issues. Some of you guys expect people to be robots. Like, I just, can we, okay? Some entrepreneurs' expectations for their people are up here. Can we just pull it down a little bit? Can we all realize that they have lives that don't revolve around us? And that's okay. And awesome. Can we show up with a little bit more empathy? 100%.
So what happens is anytime I see something that isn't great, I ask. I write it down, okay, on my phone. All my direct reports, I have a Google Doc, okay? And it says, "At Agenda." It's got all their names. And I just write down a bullet. Once a week for most of my direct reports, every two weeks at minimum, I sit down with them. Guess what's the first agenda item in that meeting? Guess. Review my list. Literally, the other person's meeting or one-on-ones is, "Review Dan's list." So I pull up my phone because I forget what I wrote in there. And I pull it out. Literally, every meeting, I have a daily meeting with my assistant. And guess what? She's like, "Hey Dan, what's on your list?" And I open it up because I, I forget. I like to just write stuff down. Let me pull it up here. "Discuss podcast when traveling to optimize flights. Example: Charleston." Podcast. That's the first item on the thing. I just wrote it down.
Now, here's the kicker, though. Coach, the way you coach somebody isn't to tell them what they did wrong and tell them how to do it right, which is what most of us do. The way I coach is, is number one, I ask myself, "What is the principle that was violated? What expectation do I have?" And what is that principle? Most often times with leaders, why you, I want to teach you to become a transformational leader, is I want to teach you the process of, um, creating other leaders. Okay? And the way we create other leaders is by coaching them up. But most of us have never trained other people or know what a coach does. I'm going to give you the three steps. First step, write this down. We go to principle. What is the principle they violated? Okay? So in that situation, for an, one of the, one of the, there's five core S. So my SOPs or things, it's called North Stars, actually. You guys just want the Google Doc that I work with for my assistant? Would that be helpful? All right, here's the deal. Just because you guys are friends of Carlos, follow me on Instagram, Dan Martell, T-W-M-A-R-T-E-L-L. Write it down. @DanMartell or you can pull out your phone, do it now, and then message me "Freedom EA," and that'll tell me to give you that document. Okay? Because I'm not giving it to anybody else. And if you're watching the recording, it's not for you, just for you guys in this room. Cool? Yes or yes? Awesome. In there, you'll see I have North Star principles. Dan Martell is my name, in case you guys are the North Star principle. One of them is that the calendar is a work of art, incomplete, and always, uh, optimizing for revenue. That's my calendar, okay? And that is one of the things that was kind of violated. She may not have known. I got to coach her up. So the first thing I said, the thing I want to talk about is the fact that my calendar wasn't at 100%.
The second part to that is a story. That's why I always write down examples, okay? Give them a story of when you learned that principle. Okay? So if you, let's take something simple. People have to show up on time. Does that bug anybody else when people will show up late for meetings? Perfect. Okay. Principle: If you're on time, you're late. Does that make sense? That's my principle. You may not even know you have these un, unexpressed expectations. So we got to document them. We got to codify them. If you're on time, you're late. So if you're late, you're super late. That's the principle. I learned this the hard way. I had a client I was supposed to meet them. I didn't show up on time, and as soon as I showed up, they said, "You missed the deal. I'm going with your vendor. Nobody's late for meetings ever again." And I embarrassed myself. You tell your personal story, okay? You can do a two-minute story, you can do a 10-minute story. So depending on the executive, I might tell a 10-minute story to really make it land. And at the end, this is the third part. So first part is principle, second part is story, third part is takeaway. I'll ask them, "What did you take away from that story? What did you learn?" And they'll say to me, "In that example, if I'm not three minutes early, I'm late." That's awesome. Then commitment. "Will you make a commitment that in the future, it'll always be on time?" "Yes." If I did that with somebody, what's the probability that you think they're going to be late in the future? Low. Because they understand that it comes from my heart, and that I learned this the hard way, and I don't want to have you learn this right now. It's low stakes. We just start working together. I need you to know most people don't follow this process for coaching. Okay? So this is the transformational leadership. We start with the outcome, where are we going? Then we go to measure, what is the one number? And then we coach them whenever we see them violate anything. And we teach them our thoughts and our stories, our experience. Anybody's had a great leader in their life? A great boss? Anybody have a great boss? I had this guy, Darcy, who was just awesome. Exactly. They probably did this to you, and you didn't even realize they were doing this. That's what made them great.
Here's my big belief: delegate the outcome, not the task. Write it down. Delegate the outcome, not the task. Stop telling people what to do. Start telling people where we're going, and let them figure out how to get there, and coach them along the process. And that's how we build people. That's how we coach up.
The third and final hot principle is the 131 rule. This will absolutely transform your life. Anybody that has a team of people and you're frustrated that your phone is always blown up and they're always calling you and they're always emailing you and they don't seem to know how to figure anything out, I'm going to solve this for the rest of your life. Do you want to learn how to do that? Yes or yes? Awesome. Here's how it works. You know why they call it a bottleneck? Because it's at the top. So you think the problem's your person on your team. I'm telling you, it's the person you're looking at when you look in the mirror. So you've taught people this, and I'm going to teach you how to unteach them this. Okay? So a few years ago, I, the 131 rule. And I'll tell you how it works. Culture in all my companies, like, you won't meet anybody at any area of the business that doesn't understand what it is because we use it as language. And I remember I had this, uh, director of HR, this recruiter on the team. And he, he messages me. He's like, "Hey, we got a problem." I was like, "What's going on, dude?" He goes, "We need to hire 12 people in the next 30 days." I go, "Yeah." He goes, "Well, I don't know how to do that." Wow. Well, what do you think I should do? "Oh, I don't know." "Well, I've never done it." I said, "Adam, I mean, I hired you, the director of HR. I hired you to do that job." "I, I don't know how to do that job." Out of both of us, who do you think should learn how to do that job? And he's like, "Well, I mean, do you have any ideas?" And I said, "What's your 131?" And he goes, "Oh, man, I don't know." Like, "I don't have time for this." And I said, "I, I don't know how to help you." Okay, write this down. If you want to be rich, be lazy. If you want to be wealthy, be incompetent. Okay? If you want to be rich, be lazy. If you want to be wealthy, be incompetent. I said, "Adam, I didn't hire you to tell you how to do your job. I hired you to tell me what to do." Does that make sense? Steve Jobs said this. He said, "It's easy to hire other people, tell them what to do. It's hard to hire people and have them tell you what to do." So I said, "What's your 131?" He said, "I don't know." I said, "How long will it take to figure out?" He goes, "Give me, give me a day." So how about the same time tomorrow, we meet up and we review? Goes, "That sounds great." It was like 4:00 that day. Next morning, 10:00 AM, he texts me, "I'm good." Duh. Like, and I'll share with you why. Here's how the framework works. One specific challenge. When somebody comes to you with problems, okay? And I love you women, but you're the worst. You guys, I love. Okay? I love you. Most of my team are executive, are women. But you guys come to me with a hurricane of stuff. It's like a tornado. I love it. It's creative. And then, but I'm like, "What are we talking about?" And they're like, "This is wrong, and this is wrong." I'm like, "One thing at a time." So one specific problem. What are your three viable options that you've considered? I want to hear them. Tell me how you researched them. And then give me your one specific recommendation. If you teach everybody on your team the 131 rules, I'll tell you what will happen. One, you'll start having your front, uh, frontline people solve problems that never make it up to your attention. You will teach people, this is another big idea, that we teach people how to treat us. Okay? We teach people how to treat us. So if we teach people every time they have a problem, they come to us, guess what they're going to do when they have a problem? Come to us. So that's why it's a bottleneck, cuz it's at the top, cuz you taught them how to do this. This is how we fix it. So 98% of the time, somebody comes to me with 131, their recommendation is what we should do. And over time, they build their confidence. And I push down all the big decision-making to the frontline. And I've got time.
I'm going to give you guys, you guys want to know the ultimate hack? This is, this is like the, I don't share this often. Frontline workers, I give them a $50 budget to fix any problem they see. And all they have to do is tell me about it after. It's called "$50 to fix it." So anybody in my company at the frontline, they can solve any problem they see if it's less than $50 without getting anybody's permission. The only rule is they have to tell their leader within the next seven days. Okay? So they can spend their credit card, expense it, it's always approved. They get to tell their leader next seven days so they can coach against it. Leaders, managers, it's $500. Directors, it's $5,000. And for my executive leadership team, my CEOs, my COOs, it's $50,000. What did I just do? I just created a framework to push decisions and issue problem-solving down to the frontline so we can move faster. I'm all about leverage, all about speed, all about growth. Most of you guys are walking over dollars to save pennies. It's hilarious. Let your people solve the problem, and then coach them up. That's how we unlock the 131 rule on a more tactical level.
So here's my philosophy. This is how we scale companies. Doesn't matter if you're a company of one or two. We build the people. The people build the business. We build the person. The person builds the business. We build a team. The team builds a business. When you shift your lens on your role in the company as a people builder, it will unlock massive growth. Okay? This is how I do it.
So with that, this is my book, "Buy Back Your Time." Bestselling book. Continue to sell more copies every week. Here's the movement I'm trying to create. I want to rid the world of companies failing because the CEO builds a business they grow to hate. Does that make sense? I think most businesses get built to a place where the entrepreneur grows to hate it, and then they want to do something else. I want to get rid of that as being the reason the companies fail. And I want to end with this big idea. For every person in the world, for human, for entrepreneurs for sure, but everybody. I think we're all here to not only buy back our time to grow our business, and we do that through the strategies I tell you with the buyback loop and the 131 and the transformational leadership. That's all awesome. That will create resources and wealth for you. Fun. I think we're here to do two things. One, become the person we needed most in our darkest days. Become the person you needed most in your darkest days. Every day you wake up and try to create that person that would have had the opportunity to speak to that kid. For me, to have the character and the resourcefulness to talk to the 15-year-old version of Dan. And then, well, while you're doing that, every day, this is the second part, is share that person with the world. Give that person to the world. And your world may be your kids, your world may be your community, your church, your CrossFit gym. I don't care. If maybe social media, and I think that would be the best place because I think that if you wake up every day to become that person and share that person, that you will create a life of fulfillment that you can't even imagine to feel.
So with that, everybody, thanks for having me. You guys are awesome. Thank you. Thank you.