0:00

So I got a crazy story. Group Home

0:02

Fostrum, Crisis Center, High-Speed Chases, Prison. I ended

0:04

up in rehab. At the end of that

0:06

program I was clean out one of the

0:08

cabins in one of the rooms and was

0:11

an old's computer and a yellow book on

0:13

Java programming. Then 20 minutes I got the

0:15

computer to say hello world. He's a serial

0:17

entrepreneur, angel investor, and SAS growth expert. He's

0:20

built and sold multiple tech companies, raised

0:22

millions in funding, and now coaches SAS

0:24

founders on scaling fast. His book, Buy

0:26

Back Your Time, teaches entrepreneurs how to reclaim

0:28

their time and scale smarter. Damn Martel. Once

0:31

I started to get a taste of success,

0:33

I was so scared of losing it that

0:35

I just allowed my work to absorb me.

0:38

I felt like there was an elephant on

0:40

my chest. I had to go see a

0:42

therapist because I was having anxiety attacks. People

0:44

don't understand that the game they're playing is

0:47

not the business model, it's themselves. Richard Branson

0:49

had a rocket ship blow up. His $50,000,

0:51

$100,000 problems don't even register on his radar,

0:53

because he's become the person who can deal

0:56

with a higher quality problem. Here

1:00

the stories learn the

1:02

proven methods and accelerate

1:04

your growth and future

1:06

through entrepreneurship Welcome to

1:08

the founder podcast with

1:10

Nathan Chan All right, so the

1:13

first question that asked everyone that

1:15

comes on is how did you

1:17

get your job? Okay, how did you

1:19

find yourself doing the work you doing

1:22

today? So I got a crazy story

1:24

I'll give you the short version because

1:26

I want to get into the meat

1:28

of our combo, but so what I

1:31

do today is kind of software.

1:33

So I run the largest coaching

1:35

organization for software CEOs, but I've

1:37

been coding since I was 17,

1:39

but the way I got into

1:41

software development is I actually gotten

1:44

a lot of trouble as a

1:46

kid, like sons of anarchy type style,

1:48

like like legit, you know,

1:50

group home, phosphrome, crisis center,

1:52

high speed chases, prison, and

1:54

I ended up in rehab and

1:56

it saved my life at 1617 I

1:59

went through a a program for 11

2:01

months that literally allowed me to build

2:03

myself worth and rebuild the trust with

2:06

my parents that I had lost. And

2:08

at the end of that program, I

2:10

was helping Rick, this maintenance guy clean

2:13

out one of the cabins. It was

2:15

built on an old church camp that

2:17

they donated to this place. And in

2:20

one of the rooms in this cabin

2:22

was an old 46 computer and a

2:24

yellow book on Java programming. And I

2:26

opened the book and something spoke to

2:29

me. I don't know why. followed chapter

2:31

one booted up the computer and within

2:33

20 minutes I got the computer to

2:36

say hello world and I thought so

2:38

whatever reason I thought it was like

2:40

a computer genius but that's literally how

2:43

I started you know growing up with

2:45

entrepreneurial air quote tendencies and then becoming

2:47

obsessed and addicted honestly to writing code

2:50

and software and I haven't looked back.

2:52

Did you say what happened next like

2:54

what was your first business? Well, this

2:57

is always a fun question, right? I

2:59

always ask people, like, how many projects

3:01

or domains did they buy versus their

3:04

business? Because, like, those are two different

3:06

things. So, the first thing I ever

3:08

made money on was actually this app

3:11

I built. This is 97. So I

3:13

come out in a rehab and I

3:15

discover this little thing called the internet,

3:17

which obviously turned out to be kind

3:20

of a big thing. Perfect timing. And

3:22

I built a CD burning tool that

3:24

my friends would pay me 20 bucks.

3:27

Because the problem with that, if you

3:29

had a CD burner back in the

3:31

day, some people are like, what's a

3:34

CD burner? Is that they would sit

3:36

on my computer to build their playlist

3:38

because you could put like 150, 200

3:41

songs on a CD. So I built

3:43

this tool. They would download it. It

3:45

would synchronize with my file drive on

3:48

my computer from all my MP3s. I

3:50

had downloaded off Napster in Limaw, and

3:52

because they am in all these different

3:55

tools. And then they could build their

3:57

playlist and then they give me 20

3:59

bucks. And then I would burn them

4:02

a CD. And that was like the

4:04

first like thing I built on my

4:06

computer that I actually got paid to

4:08

do. But my first company was probably

4:11

at 1819, like not too long after

4:13

I built a vacation rental website for

4:15

my dad initially. I kind of lied

4:18

to my dad. My dad was like,

4:20

hey, I need this web page for,

4:22

because he kept getting calls, he had

4:25

a cottage he would rent out. And

4:27

he asked me, he goes like, can

4:29

you build me a web page? And

4:32

then I went online and I wanted

4:34

to learn this new programming language called

4:36

Cold Fusion. So I told them that

4:39

to build a web page, it was

4:41

going to cost 600 bucks. And he's

4:43

like, why is it going to cost

4:46

600 bucks to host a web page

4:48

of my cottage? And I was like,

4:50

it's just what it costs. The truth

4:53

was is I wanted to rent a

4:55

server on the cycle one in one,

4:57

one and one.com, and I needed that

4:59

specific one that would run the Cold

5:02

Fusion software. And so I took my

5:04

dad's money and his project and built.

5:06

this vacation rental site no different than

5:09

VRBO almost identical in concept in 1998-99

5:11

and and that was the first business

5:13

that I actually launched we called it

5:16

at maritime vacation.ca and the way I

5:18

got customers was kind of nutty story

5:20

is and I didn't know anything about

5:23

marketing or honestly making money on the

5:25

internet at all. It was just a

5:27

software guy. And I told my buddy

5:30

Dave about this idea I built, you

5:32

know, this software that lets you create

5:34

like a listings page for your cottage,

5:37

your bed and breakfast in our area

5:39

that we grew up in in Canada.

5:41

And he goes, hey, there's this magazine

5:43

that the government prints, it's like the

5:46

tourism magazine, and on the back of

5:48

the magazine is a listing of like

5:50

all the bed and breakfasts and cottages

5:53

for rent in the province. So I

5:55

bet those people would want to pay

5:57

you for one of your pages you

6:00

could build with that thing you built.

6:02

And I literally sat there in like

6:04

awe, immediately ran to my computer, got

6:07

this magazine, paid my little brother, he

6:09

was like four years. younger than me

6:11

to add all of the contact information,

6:14

the addresses, into a Microsoft Access database,

6:16

and I paid them like three bucks

6:18

an hour, and then created a form

6:21

letter in Microsoft Word and literally sent

6:23

out to people a blanket, like sales,

6:25

you would probably call it direct mail,

6:28

but it was just like this page

6:30

that said like, we're maritime vacation, if

6:32

you're looking to build a website for

6:34

your bed and breakfast. fill out this

6:37

application which had all the details, send

6:39

us $30, and three photos of your

6:41

listing that will scan in and put

6:44

on your page. And if you want

6:46

the photos back, add an extra $5

6:48

and we'll ship them back after. And

6:51

I sent out like hundreds of these.

6:53

And I remember like maybe seven days

6:55

after my dad came home and he

6:58

like checked the mail and there was

7:00

like a stack of envelopes. And he

7:02

just looks at me. Because obviously I

7:05

grew up in a pretty, I was

7:07

a little mischievous and he just, he

7:09

just literally asked me like, what did

7:12

you do? And I was like, holy

7:14

moly. And we started opening up these

7:16

letters. Because you know, this is 99,

7:19

98. People, people had no problem sending

7:21

30 bucks in the mail in cash,

7:23

but they were full of cash. And

7:25

that was the first time I kind

7:28

of made internet on the money from

7:30

somebody that didn't know me. And I

7:32

kind of joked that was the day

7:35

that I went pro. Like you know

7:37

there's like the day that you finally

7:39

like quote unquote make it for me

7:42

that was 18 with maritime vacation even

7:44

though it completely failed because a competitor

7:46

called at the cottage.com kind of came

7:49

in and absolutely crushed me. It was

7:51

an incredible experience. I learned a lot

7:53

about entrepreneurship and just building a thing

7:56

that was valuable to other people and

7:58

marketing it and that was a fun

8:00

experience. you have been typically known as

8:03

kind of like the sass guy so

8:05

I'd love to know you know you

8:07

have a really large sass academy and

8:09

you know some of some of my

8:12

friends have joined it and like you

8:14

know spoke very very highly of it

8:16

I'm curious what was your first SAS

8:19

business and had you fall into SAS?

8:21

Yeah, you know, SAS was one of

8:23

those things, I think, growing up in

8:26

a world with a lot of chaos

8:28

that the predictability of it just spoke

8:30

to me. So back when I started,

8:33

we just called it like ASP, like

8:35

application service provider, like we would host

8:37

the application that were hosted services. We

8:40

didn't even call it that. I mean,

8:42

it's gone through this evolution of like,

8:44

I would say hosted solutions to web

8:47

base. products to subscription to cloud to

8:49

now SAS is kind of the thing

8:51

we call the category. The first, I

8:54

mean, I built a bunch of SAS

8:56

tools with my company, Spheric, which was

8:58

like the next company that, well, actually,

9:00

no, I did a hosting company that

9:03

failed. I failed for seven years, okay?

9:05

Enthusiastically. This is what people I think

9:07

don't know is. Like I didn't side

9:10

hustle these things. I was all in.

9:12

Like I would sit there and code

9:14

12 14 hours a day. I would,

9:17

you know, whatever I had to do.

9:19

And so like I did the hosting

9:21

company and that and that failed because

9:24

we had a bank as a customer.

9:26

I almost got sued. So I got

9:28

way over my skis on that one.

9:31

And then my third company was a

9:33

company called Spheric Technologies. I'm dating myself.

9:35

Some people were like, what is that?

9:38

Well, it was big companies started customizing

9:40

the home page experience for their employees,

9:42

right? You open up the browser and

9:45

the default page would be their intranet,

9:47

but then intranets got smart and those

9:49

were called portals. I built SAS products

9:51

for Fortune 500 companies to integrate with

9:54

their ERP systems. We're talking Siebel, Oracle,

9:56

SAP. you know, bea web lot like

9:58

all these different enterprise solutions. We built

10:01

these subscription. software tools that people would

10:03

install inside their companies, but pay us

10:05

for them in 2004. So that company,

10:08

I mean, when I started, I hired

10:10

a business coach. He was an

10:12

emith certified coach named Bob.

10:14

And yeah, he was the reason

10:16

why I finally had success

10:18

in business. And that company,

10:20

Spirk, we almost did a

10:22

million in our first year,

10:24

just shy. And then we.

10:27

literally grew about 150% every

10:29

year for four years. And

10:31

I just, I went with

10:33

it and eventually we got

10:35

acquired in early 2008 and

10:37

that was, that was my

10:39

first kind of successful entrepreneurship

10:43

experience and it laid

10:45

the foundation for a lot of

10:47

things afterwards. So I have

10:49

to ask the question, you

10:51

started many other companies since,

10:53

Clarity.F.M., Flowtown, and then, yeah,

10:55

you started your SAS Academy,

10:58

and you kind of gone

11:00

full circle now, and you

11:02

really give back. How can

11:04

you ever start another SAS

11:06

business? Like, because, you know,

11:08

some say, and I'm like

11:10

to hear your take, that

11:12

like, in terms of wealth

11:14

creation, building a SAS company

11:16

is one of the best tools out

11:18

there. Yeah, so I mean, in, well,

11:20

yeah, so what's interesting

11:22

is in the book, I

11:25

actually talk about what I

11:27

call the three levels of

11:29

trades. Level one is employee,

11:31

right, where you trade your

11:33

time for money. Which, you know,

11:35

you can make a lot of money. The

11:37

highest paid employee in the world makes over

11:39

$100 million a year and that's Tim Cook

11:42

of Apple. So it's not even like, there's

11:44

no good or bad, it just is. You

11:46

know, people trade their time essentially for money.

11:48

And then when you go to level two,

11:50

which is entrepreneurship, that's when you start to

11:52

learn how to trade money for time, right?

11:54

You hire an employee to buy back your

11:57

time to then reinvest it in things that make

11:59

you more money. And then level three is

12:01

money for money. And that's where you

12:03

learn the skill to invest in opportunities

12:05

that have your money working for you.

12:08

And I just got lucky that when

12:10

I was 27, I read Rich Dad

12:12

Portad and I kind of started to

12:14

understand the quadriny talks about and kind

12:16

of the investor element. And I just

12:18

started investing my money. So what people

12:20

don't realize is I have a portfolio.

12:23

a pretty substantial portfolio of SAS companies

12:25

I've invested in, and that's kind of

12:27

what I do day to day. So

12:29

I have SAS Academy, which is the

12:31

largest coaching organization for SAS CEOs in

12:33

the world. We have, I mean, over

12:36

1,000 active clients. We've coached, I think,

12:38

4,000 people at this point. And then

12:40

I have high-speed ventures. And high-speed ventures

12:42

is my kind of personal family office

12:44

where, you know, we'll evaluate buying companies,

12:46

we'll. We've invested in companies. Now we're

12:48

considering putting together a fun to actually

12:51

invest in some of our earlier stage

12:53

companies that we coach. So yeah, I

12:55

kind of a while ago decided to

12:57

ask myself and it's why I wrote

12:59

this book is, you know, what would

13:01

my perfect week look like? What kind

13:04

of work would I be doing? What's

13:06

important to me at this stage of

13:08

my career? You know, what do I

13:10

want my life to stand for? And

13:12

I just. like to me I'd rather

13:14

support CEOs of SAS companies and either

13:17

through coaching or investing and then you

13:19

know just work you know because I

13:21

have two young kids like have a

13:23

little bit more I wouldn't say worth

13:25

like like work life integration that's kind

13:27

of what I'm optimizing for so I

13:29

think that especially doing a venture back

13:32

companies completely different a lot of my

13:34

clients I coach are bootstrapped so I

13:36

think that but again I now hire

13:38

CEOs to run companies so I'm not

13:40

I don't need again it's the whole

13:42

buying back your time at some point

13:45

you go look I love being a

13:47

CEO but I don't want to be

13:49

the CEO of this company, I can

13:51

just hire somebody to run it. Yeah,

13:53

no, you mentioned work life integration. I

13:55

like that term a lot. You know,

13:57

the way I do it is, I

14:00

think there's three things you need to

14:02

kind of like integrate work and your

14:04

life into like a rhythm. First thing

14:06

you need is a vision. And, you

14:08

know, and I actually cover this in

14:10

the book because I realize when people

14:13

are trying to understand the value of

14:15

their time and buying it back and

14:17

then what do I do with the

14:19

newfound time. Without a clear vision, it

14:21

makes it really hard to make decisions

14:23

today. So I always coach my clients

14:26

to like look out at least 25

14:28

years. And in the book I call

14:30

it the 10 X vision map. So

14:32

once you understand on like these four

14:34

dimensions, I share what our life looks

14:36

like, then you work backwards to, you

14:38

know, what would be the next 12

14:41

months, directionally accurate decisions, both the quality

14:43

of life. how you want to show

14:45

up as a parent, how you want

14:47

to show up as a leader, how

14:49

you, the empire you want to build

14:51

over the next 12 months, and then

14:54

you then come to the the weak

14:56

cadence, because I think that's like, if

14:58

somebody says something's important to me, I

15:00

just asked them to see their calendar,

15:02

because usually they will, whether they like

15:04

it or not, where they allocate their

15:06

time is a clear indication to what's

15:09

important to somebody. So to me, I

15:11

always start with the rhythm in my

15:13

calendar that's aligned with the 12-month goals,

15:15

personal and professional, that's aligned with the

15:17

10X vision map so that I can

15:19

be super intentional about today. So when

15:22

it comes to work-life integration, because I

15:24

have that long-term view and short-term view,

15:26

I make decisions on a weekly monthly

15:28

basis. When you know what's important to

15:30

you and you actually add to your

15:32

calendar you like insert it as block

15:35

time you know again I teach us

15:37

in the perfect week framework you realize

15:39

there's a whole lot of extra your

15:41

time to do other stuff. And then

15:43

you don't get to a place where

15:45

you're having to fix things. See, the

15:47

reason why I got so intentional is

15:50

because there was a point in my

15:52

career where I was, I was moving

15:54

forward really fast, but then I'd have

15:56

to slow down to fix what I

15:58

call emotional shrapnel, right? You have to

16:00

apologize to somebody for missing something. Or

16:03

you got to, you know, you got

16:05

to go to the gym because you

16:07

put on 15 pounds because you were

16:09

traveling too much or whatever it. So

16:11

like. What I've decided is if I

16:13

can be more intentional today aligned with

16:15

my goals, I can actually get more

16:18

time long term back because I'm not

16:20

spending time fixing those things that I'm

16:22

creating emotional shrapnel around because I'm kind

16:24

of measuring twice and cut in once,

16:26

if that makes sense. In the book,

16:28

you talk about how to scale your

16:31

business fast, you help entrepreneurs. like scalar

16:33

business fast without avoiding burnout. I'm curious,

16:35

have you experienced burnout? Is that, you

16:37

know, and I'd love to hear how

16:39

you've worked through it and some of

16:41

the things that perhaps you help, you

16:43

know, guide your founders to experience, like,

16:46

not experience burnout, because I think it's

16:48

easy to get it fall into that.

16:50

I really appreciate the question, Nathan, because

16:52

that was my reality 24 to 28

16:54

when I was building my company's spherical

16:56

technologies. I only had one gear and

16:59

it was all in. I didn't know

17:01

any different and because I'd failed prior

17:03

I was so scared to do it

17:05

again that once I started to get

17:07

a taste of success or momentum, I

17:09

was so scared of losing it that

17:12

I just allowed my work to absorb

17:14

me, to become me, my identity, everything,

17:16

my relationships, what I valued and you

17:18

know, I was engaged to a woman

17:20

that for the most part put up

17:22

with it. I mean, it was kind

17:24

of when I look at how I

17:27

showed up in that relationship, it's absolutely

17:29

embarrassing. And what happened was is, you

17:31

know, towards the, you know, two and

17:33

a half years I was into this

17:35

relationship with this woman. We got engaged,

17:37

I was, you know, we ended up

17:40

buying a house together and, you know,

17:42

one Sunday, because I worked every day,

17:44

Saturdays, Sundays, but Sundays I was usually

17:46

home by noon. And she told me,

17:48

you gotta be home by 1130. We've

17:50

got to go, my friends having a

17:52

birthday party. And I went to the

17:55

office and I look up and I

17:57

was in the zone, I was getting

17:59

stuff done and it's 1.30 and I'm

18:01

like, oh no. So I like jump

18:03

in my car this old Volkswagen jetta

18:05

and rush home, pull into our driveway

18:08

and I run in the house and

18:10

I found her in tears in tears

18:12

in the kitchen. You know, and she

18:14

just looks at me and she goes,

18:16

I can't do this anymore. And she

18:18

takes her ring off and she drops

18:21

it on the counter and walks past

18:23

me and goes and lives with her

18:25

parents and that was the last day

18:27

seven weeks before our wedding. And it

18:29

was so such a shot to my.

18:31

self-worth and my identity because like you

18:33

know as entrepreneurs we say we're doing

18:36

it for our families right we're doing

18:38

it for our future and you know

18:40

it's a sacrifice today for that future

18:42

and I just totally had it backwards

18:44

so when you talk about like anxiety

18:46

I mean I got to a place

18:49

where I felt like there was a

18:51

elephant on my chest I had to

18:53

go see a therapist because I was

18:55

having anxiety attacks and he made me

18:57

walk around with a rock in my

18:59

pocket and would squeeze it I mean

19:01

it's just you know and And what

19:04

I love about the work I get

19:06

to do today, that was the moment

19:08

that I realize I had to find

19:10

a different way to build company. I

19:12

think like if I didn't go through

19:14

that I would never have written the

19:17

book. I would have never. found the

19:19

tools to build the kind of companies

19:21

I have in the way I have.

19:23

And this is where I find a

19:25

lot of entrepreneurs, right? When they eventually

19:27

come into my world, you know, people

19:30

that have adrenal fatigue, they have, their

19:32

body literally says, I don't want to

19:34

do this anymore, and you don't seem

19:36

like you're going to slow down. So,

19:38

boom, and they just drop it. So,

19:40

the short answer of how I help

19:42

them is, is this framework called the

19:45

buyback back loop. The buyback loops based

19:47

on a principle called the buyback principle,

19:49

which states... You don't hire people to

19:51

grow your business. You hire people to

19:53

buy back your time. So it's a

19:55

calendar over capacity problem. And to do

19:58

that, you need to figure out what

20:00

your buyback rate is. How much can

20:02

I afford to pay other people to

20:04

do things? So that I could, and

20:06

this is where the loop comes in.

20:08

The buyback loop is audit transfer fill.

20:10

When I hit the pain line, I

20:13

need to immediately go to an audit,

20:15

what I call a time and energy

20:17

audit. and we walk through their calendar

20:19

and we figure out all the things

20:21

that take energy from them, all the

20:23

things that give them energy, all the

20:26

things that I pay somebody else to

20:28

do, and then all the things that

20:30

would cost a lot. So I use

20:32

a four dollar sign symbols, one dollar

20:34

sign is low cost, four dollars high.

20:36

Then we take all the stuff that's

20:39

red and one dollar sign task and

20:41

we put it into a bucket and

20:43

that is the person we're gonna hire

20:45

next. So first is audit, then transfer

20:47

and we have a system that I

20:49

teach people on how to get things

20:51

off your plate in a way that

20:54

you still feel in control, but that

20:56

you no longer own those outcomes. And

20:58

then the third step is to fill.

21:00

And if you don't fill properly, then

21:02

you actually don't create the momentum in

21:04

the loop to go to the next

21:07

stage, right? Most people don't get this

21:09

right. Filling is one of three things.

21:11

Filling is a decision to invest in

21:13

either doing the thing that you do

21:15

best that makes you money. So if

21:17

you buy back 10 hours a week

21:19

and you're a designer and you're getting

21:22

paid $100 an hour, and your buyback

21:24

rates only like $12, yeah, go do

21:26

more design work. Right, but if that's

21:28

maximized, then you gotta go look at,

21:30

you know, where's the biggest leveraged opportunity?

21:32

And I usually look at it through

21:35

skills. You know, these are things like

21:37

strategy or know-how or acquiring knowledge, right?

21:39

The other one is beliefs. A lot

21:41

of entrepreneurs are stuck where they're at

21:43

because they have a belief about the

21:45

world that just simply isn't true. So

21:48

they need to do some mindset work.

21:50

That's my favorite part that I help

21:52

founders with. And then the other one

21:54

is character traits, right? You could be

21:56

incredibly skilled, have a great, you know,

21:58

view on the world. but are not

22:01

consistent character trait and you'll

22:03

never create momentum right so

22:05

that's the fill part if you do that

22:08

then you get to go up the buyback

22:10

loop to the next you know opportunity or

22:12

pain line because the whole point is I

22:14

want to teach people how to build a

22:17

company they don't grow to hate so you

22:19

said that a lot of the SAS founders

22:21

you coach often bootstrapped what

22:23

about the ones that raised have

22:26

raised money or significant money is

22:28

it possible to operate with the

22:30

kind of frequency that you speak

22:32

of if you've got pressures from

22:35

VCs and you've raised a truck

22:37

ton of money and there's a

22:39

lot of like hanging on your shoulder.

22:41

Yeah, so here's the only thing

22:43

that changes. So 70% of my

22:45

clients are bootstrap, 30% are venture

22:47

backed. When you figure out what

22:49

your buyback rate is, let's say

22:51

it's $12.50, the only thing that

22:53

changes for a venture back company

22:55

is I tell them to add

22:57

a zero to it. And the

22:59

reason why you add a zero

23:02

is because what an investor is

23:04

giving you capital to do today

23:06

is they're buying a future outcome.

23:08

So there's this bet they're making

23:11

and it's high risk. So that's

23:13

why you add a zero and

23:15

it sounds crazy. So you're saying

23:18

like my buyback rate is now

23:20

$125. Yep. But the reason why

23:22

is because you're able to

23:24

be a little bit wasteful today.

23:27

with the anticipation that those decisions

23:29

are the right decisions for the

23:31

future. But nothing changes in regards

23:33

to, and this is actually where

23:35

I learned this strategy was moving

23:37

to Silicon Valley after I sold

23:39

my first company that was successful

23:42

and meeting these early 20 year

23:44

old entrepreneurs that were building 50,

23:46

100 million dollar companies, people like

23:48

Naval Ravicon, right? So, Naval taught

23:50

me the idea of leverage. Everybody

23:52

has the same amount of time. It's

23:54

a constant. And certain people have

23:56

a higher ability to create an

23:59

output. Okay, Elon. Musk's output is

24:01

on another level, but his time

24:03

is the same. So what's the

24:05

difference? Well, the difference is the

24:07

multiplier of leverage. And there's only

24:09

four ways to create leverage. They're

24:11

called the four C's. The first

24:13

one is content. What we're doing

24:15

now, 100 million people could watch

24:17

this, and it wouldn't take any

24:19

extra time for them to do

24:21

that from us. So huge leveraging

24:23

content. Playbooks is another example, creating

24:25

a repeatable documented system. The second

24:27

C is code. software, automation, AI,

24:29

right? Huge leverage. It's why SAS

24:31

businesses in general have such high

24:33

multiples is because they help companies

24:35

get more productivity out of their

24:37

teams, do more with less people,

24:39

etc. Like there's a reason why

24:41

they're valuable assets to build. So

24:43

that's code. Third is capital, which

24:45

we all know. Right? Like we

24:47

raise capital and this is why

24:49

the buyback rate goes up if

24:51

you have capital. It's because I'm

24:53

looking for leverage, right? But in

24:55

regards to the decision structure and

24:57

the sequencing and the filtering and

24:59

what you should do with the

25:01

free time, everything stays the same.

25:03

You just get to move faster

25:05

because you have that capital. The

25:07

four C is collaboration. And it's

25:09

literally the premise of my book.

25:11

It's regardless of what business you're

25:13

in, when you start to grow,

25:15

you're deploying. dollars to acquire like

25:17

employees time or contractors and that's

25:19

the collaboration C. And most people

25:21

just do it in the wrong

25:23

order. So instead of like buying

25:25

back time out of their calendar

25:27

by hiring people to grab those

25:29

buckets of thing that drain their

25:31

energy, that's very little cost to

25:33

get off their plate. They sometimes

25:35

make the mistake of hiring like

25:37

C-O-O's and chief product officers and

25:39

V-P's of sales when they're a

25:41

small team of seven. And it's

25:43

like as a CEO, how about

25:46

you start with not doing your

25:48

laundry and not cleaning your apartment?

25:50

and not managing your inbox, and

25:52

not spending all day long doing

25:54

customer support. Now, I don't disagree

25:56

that there's value in some of

25:58

these things, like customer support has

26:00

a ton of product innovation, but

26:02

what I coach my clients on

26:04

is pay somebody to process the

26:06

emails to find the customer innovation

26:08

and you can collaborate with them,

26:10

and that's way more. leverage than

26:12

you literally spending four hours a

26:14

day doing customer support emails. So

26:16

really, the main premise of your

26:18

book is kind of like how

26:20

to find leverage and optimize your

26:22

time. It's funny because people, you

26:24

know, people go, oh, buy back

26:26

your time. It's about productivity. Well,

26:28

it is, but it's more than

26:30

that. People go, oh, it's about

26:32

scaling a business. Yep, 100 percent.

26:34

but it'll also help you be

26:36

a better creator. It'll help you

26:38

be a better artist. It'll help

26:40

you be a better team member.

26:42

I just don't want them doing

26:44

stuff that somebody else should be

26:46

doing because their time and their

26:48

creativity at the scale of their

26:50

business, if you understand your buyback

26:52

rate, shouldn't be spent on editing

26:54

videos or. publishing on social media

26:56

at scale. Like you can definitely

26:58

find people that are as capable

27:00

and honestly better at those things

27:02

so that you can go focus

27:04

on creating opportunities that are better

27:06

and or taking the time to

27:08

recharge and go spend it with

27:10

people so you can do it

27:12

for a decade and not burn

27:14

out after three. Yeah, that's cool.

27:16

I respect that a lot, man.

27:18

So love to switch gears a

27:20

little bit and talk about building

27:22

a sass business. Do you think

27:24

out of all online businesses, ecom,

27:26

you know, services, agency, lead gen,

27:28

online education, like SAS is, is

27:30

the hardest? Here's what I've learned.

27:32

All businesses are hard. You know,

27:34

you think about the internet, right?

27:36

Well, the internet made things a

27:38

hundred times easier for people to

27:41

like source information and communicate, etc.

27:43

And I think a lot of

27:45

people. people thought like, oh, we're

27:47

gonna have a resurgence of like

27:49

100 times more entrepreneurs. And the

27:51

data actually doesn't show that. The

27:53

data shows that they're still the

27:55

same amount of entrepreneurs per capita.

27:57

What's changed with technology and innovation

27:59

is that the wealth creation is

28:01

just more distributed towards the top

28:03

because the tooling and capabilities of

28:05

certain entrepreneurs. They have more leverage

28:07

kind of what we're talking about

28:09

the four C's so the reason

28:11

why I don't think Sass is

28:13

harder is because I think the

28:15

hardest part in any business is

28:17

the conversation the CEO has with

28:19

themselves. It's the real estate between

28:21

their ears. It's the capability of

28:23

a of an individual to grow

28:25

through the challenges. to become a

28:27

person who can deal with higher

28:29

level problems, you know, one of

28:31

my mentors, this guy Roger, he

28:33

says to me, he goes, and

28:35

a long time ago, he taught

28:37

me this, he goes, you want

28:39

to increase the level of problems

28:41

that he calls them factors of

28:43

10, you know, like when you

28:45

start off a $10 problem is

28:47

kind of a thing, right? And

28:49

maybe for some people like, I

28:51

never found that was a $10

28:53

problem, right? Your cell phone bills

28:55

like. Overage is $100 and you're

28:57

like, oh no, and you like

28:59

reach out to the company and

29:01

you freak out and you tell

29:03

them they gotta give you a

29:05

refund or whatever, you're gonna cancel

29:07

and you threaten them. I mean,

29:09

eventually, hopefully you get to where

29:11

a thousand dollar problems start showing

29:13

up like $10 problems, right? And

29:15

if you're Richard Branson who had

29:17

the privilege of spending time with

29:19

and I write about in the

29:21

book, the time I was hanging

29:23

out with him at his house

29:25

in Switzerland, he had just had

29:27

a rocket ship blow up. His

29:29

50,000 hundred thousand dollar problems don't

29:31

even register on his radar because

29:33

he's become the person who can

29:35

deal with a higher quality problem

29:38

and I think that's If you

29:40

said like is it a business

29:42

model is hard. No. What's hard

29:44

is that people don't understand that

29:46

the game they're playing is not

29:48

the business model, it's themselves, right?

29:50

Are there certain industries that have

29:52

higher gross margins? Are there certain

29:54

industries that have easier ways to

29:56

get distribution? Are there certain businesses

29:58

that have more elegant? uh... reoccurring

30:00

models like sass where you know

30:02

the the the reoccurring nature of

30:04

it makes it easier to operate

30:06

because there's predictability for sure but

30:08

the truth is is like at

30:10

scale all companies are valued similarly

30:12

like multiples will be like okay

30:14

well this one's a six x

30:16

on Ebida this one's a ten

30:18

x on Ebida like but i

30:20

mean at that level like they're

30:22

relatively the same so yeah i

30:24

just I don't know if they're

30:26

harder, because I've seen friends struggle

30:28

just as much starting a longcare

30:30

company as they have building a

30:32

software product. You talk about problems,

30:34

can you talk us through the

30:36

131 method? This is easily one

30:38

of my favorite things to teach

30:40

people, because I think it has

30:42

the highest impact for lease amount

30:44

of effort. Like we think about

30:46

minimum effective doses as a leader,

30:48

this tool can transform somebody if

30:50

they truly apply it. business owners

30:52

and entrepreneurs and usually it's around

30:54

12 employees where they start to

30:56

feel the pain right where they

30:58

wake up and you know they

31:00

they you know they have like

31:02

a list of projects they want

31:04

to work on and their inbox

31:06

has a couple hundred emails I

31:08

have to get back to and

31:10

and they start their day and

31:12

next thing you know they're on

31:14

a meeting after meeting after meeting

31:16

trying to tell people what to

31:18

do check that it got it

31:20

done and tell them what to

31:22

do next right. trying to get

31:24

people doing the right thing in

31:26

their work and then putting out

31:28

fires and then pretty much like

31:30

once if you have kids you

31:33

put you know you feed the

31:35

kids you put them to bed

31:37

or once you get you know

31:39

finished dinner you then go back

31:41

to work just actually start on

31:43

the projects you said you would

31:45

do in the morning that you

31:47

didn't get to and reply to

31:49

all the emails that are urgent

31:51

that you know if you don't

31:53

get back to they're going to

31:55

be upset. The 131 rule gives

31:57

a tool where any problem that

31:59

a direct report brings into your

32:01

world, you ask them to come

32:03

with one clear problem. Okay, that's

32:05

the one, one clear problem, because people

32:07

will come to you with multiple, you

32:09

know, they're like, what, I literally, even

32:11

when I'm coaching clients and they're explained

32:14

to me in the scenario, I go,

32:16

so define the challenge, give me the

32:18

specific problem, because right now you talked

32:20

about, I'm counting three, maybe four in

32:22

what you just said, and they're like,

32:24

well, here's the problem we need to

32:26

solve. Okay, let's get that clear. Okay,

32:28

perfect. Then what you ask somebody to

32:31

then do is say, what are your

32:33

three viable options? So the three

32:35

viable options are, you know, well, we

32:37

could invest in this software and do

32:40

this, we could hire this consultant that

32:42

can do this, or we can decide

32:44

to, you know, shut this down and

32:46

do this instead, right? So three viable

32:49

options. And then the other one, so

32:51

it's one, three, one, is what's the

32:53

one recommendation they have. You know, out

32:55

of those three, I'm recommending two.

32:57

I probably use this like just

33:00

today, probably eight nine times on

33:02

calls, eight nine times on slack.

33:04

Like I continuously remind people like,

33:06

you know, a once time I had

33:08

a HR director come to me and he's

33:10

like, you know, I got a problem. I

33:12

was like, what's the issue? He's like, I

33:15

got to hire 12 people in the next

33:17

quarter. And I go, cool. Because I

33:19

don't know how to do that. I go. Well,

33:21

that sounds like a fun challenge. He's

33:24

like, yeah, but I don't know how

33:26

to do it. And I go, okay. And

33:28

he's like looking at me to

33:30

give him the answer and I go,

33:32

here's a challenge. I know why

33:34

you came to me and I

33:36

appreciate and understand the frustration,

33:39

but like, if I give you the answer,

33:41

I'm technically doing your job.

33:43

And Steve Jobs said, it best.

33:45

He said, the easy thing is to

33:48

hire somebody and tell you what to

33:50

do. So what I said to him is like.

33:52

Go do the 131. Do you have it? And

33:54

he's like, no. And I'm like, cool. How much

33:56

time do you need? He's like, give me a

33:58

couple days. I said, perfect. When you're ready,

34:01

call me, I'll be available. The

34:03

next day, text me, I'm good. He didn't

34:05

need me. He knew exactly once he

34:07

did the research, the obvious solution was

34:10

the one he picked. So he didn't

34:12

even have to do one three one

34:14

with me. And that's the beauty of

34:17

the one three one is that over

34:19

time when you build this in your

34:21

culture and you teach it to people,

34:24

you'll get so much more leverage because

34:26

you're pushing decision making down to

34:28

the front line. because it's at the

34:30

top and it's the founder, it's the

34:32

entrepreneur, it's the CEO, and you

34:34

want to push things down and be

34:37

owned by people. I mean, 90% of

34:39

the time somebody presents me their 131

34:41

and their recommendation, it's of course, that

34:43

is the obvious solution, do that, right?

34:45

So then I only get presented

34:48

the really fun stuff. Yeah, well, that's

34:50

gold. That is gold. Thank you for

34:52

sharing, man. I have to ask though,

34:54

then. Your one-on-one must be pretty short

34:57

with your direct reports. What are you

34:59

doing when you're coaching with they're not

35:01

bringing problems, right? Like, more feedback? Yeah,

35:03

so I have a very structured approach. For me,

35:06

what I've learned a long time ago

35:08

is, so there's like the business sequencing

35:10

problems and like those kind of things.

35:12

What I like to do in my

35:14

one-on-one is two things. One, I want

35:16

to get, well, probably three. I want

35:18

to get clear that they understand the

35:21

vision. Right? Because I think as a

35:23

CEO, there's three things we do. Vision,

35:25

people, and money. So in my one on

35:27

ones, I make sure I'm always communicating

35:29

16 months, 18 months into the future.

35:32

So I'll just take some time to

35:34

share that. I'll ask them for their

35:36

perspective, where are we going? If we

35:38

can get alignment, you know, begin with

35:41

the end in mind on where we're

35:43

going, then I want to talk about

35:45

their specific areas of opportunity. And these

35:47

are, again, these are not strategic. characters

35:50

traits you are you working on what skills

35:52

are you working on you know based on

35:55

where we're going where who do you need

35:57

to become to get us there and then

35:59

I I always talk about their personal

36:01

and professional goals, because I learned a

36:04

long time ago, you know, especially as

36:06

I coach, it's fun for me to

36:08

work with, like incredibly talented CEOs, but

36:10

see these patterns emerge and that's why

36:13

I wanted to write a book about

36:15

this. And things like. they're frustrated with

36:17

their team because their team doesn't show

36:20

up the way they do to solve

36:22

the problem, right? They always feel like

36:24

they're always pulling everybody up the mountain

36:26

and like trying to get them to

36:29

follow their vision. It just feels like

36:31

there's just a lot of weight on

36:33

their shoulders to carry. And what I

36:35

usually tell them is, do you have

36:38

clarity on your direct reports personal goals

36:40

in their life? Right? And they're like,

36:42

yeah, I know what they want. I'm

36:45

like, okay, let me be clear. Do

36:47

you know exactly where they want to

36:49

be in five years? Like, can you

36:51

describe to me where your direct report

36:54

in five years what their life looks

36:56

like to the same degree that you

36:58

could explain to me what their life

37:01

looks like, to the same degree that

37:03

you could explain to me what their

37:05

life looks like, what their life looks

37:07

like, to the same degree that you

37:10

could explain to me what their life

37:12

looks like? Okay, if the direct report

37:14

doesn't, if you don't know what their

37:16

goals are personally and professionally, and you

37:18

haven't explained to them how your business

37:20

is going to support them in doing

37:22

that, then you will always feel like

37:24

you're trying to pull people up a

37:26

mountain. Amazing. Well, thank you so much

37:29

Dan. Really appreciate your time. It's an

37:31

honor. Thanks Nathan. All right, so if

37:33

you love this episode, make sure to

37:35

check out my interview with Alex Homozie

37:37

on how he scales companies from zero

37:39

straight to two million dollars a month

37:41

in less than a year. We were

37:43

like, how have you cheap? You cheap?

37:45

Like there's five years of my life

37:47

that disappeared. In fact, I lost all

37:49

the money, which I talked about in

37:52

the book. I had all the gyms.

37:54

I did the turn around and then

37:56

I had zero dollars. It was the

37:58

skills, the it was

38:00

the character traits, and

38:02

the beliefs.