The only 4 skills you need to build a $1B company…

Summary

The speaker shares insights on scaling businesses and leveraging time effectively. He emphasizes the importance of understanding leverage through the formula 'time multiplied by leverage equals output' and identifies four master skills: capital, code, content, and collaboration. The talk delves into strategies like the 'buyback principle' for hiring to free up time and the '131 rule' for empowering employees to make decisions, ultimately aiming to create a fulfilling life and business through transformational leadership and personal growth.

Takeaways

• 😀 The importance of understanding leverage in business: Time multiplied by leverage equals output, emphasizing the need for efficiency and maximizing the use of resources.
• 💡 The four 'Master Skills' for creating leverage are Capital, Code, Content, and Collaboration, which are essential for an entrepreneur looking to scale their business.
• 🛠️ The 'Buyback Principle' suggests that hiring should be done to buy back time, focusing on the calendar and capacity strategy to avoid reaching a 'pain line' in business growth.
• 🔄 The 'Replacement Ladder' strategy for hiring, which starts with administrative tasks and progresses to customer success, marketing, sales, and finally leadership.
• 📈 The concept of a 'Complexity Ceiling', where entrepreneurs hit a level of difficulty that they believe they cannot surpass, often leading to stagnation or the desire to sell their business.
• 📚 The significance of 'Transformational Leadership' over 'Transactional Leadership', focusing on empowering employees to achieve outcomes rather than just completing tasks.
• 🗂️ The '131 Rule' for problem-solving and decision-making, encouraging employees to present one specific problem, three viable options, and one recommendation.
• 💼 The empowerment of front-line workers with a '50 to Fix It' budget, allowing them to solve minor issues quickly without needing managerial approval.
• 🌐 The role of systems in creating leverage, with the acronym SYSTEMS representing 'Save Yourself Time, Energy, and Money'.
• 📈 The emphasis on building an 'Empire', defined as a life of unlimited creation where one never has to retire, highlighting the mindset for continuous growth and innovation.
• 🤝 The need for empathy and understanding in leadership, recognizing that employees have lives outside of work and should be treated with respect and consideration.

Q & A

Why did the speaker move to San Francisco?

The speaker moved to San Francisco to understand how 20-year-olds built billion-dollar companies.

What is the concept of 'leverage' as discussed in the script?

Leverage in this context refers to the ability to maximize output for a unit of time, with the formula being time multiplied by leverage equals output.

What are the four 'Master skills' for creating leverage according to the speaker?

The four 'Master skills' for creating leverage are Capital, Code, Content, and Collaboration.

What is the 'buyback principle' mentioned in the script?

The 'buyback principle' is about hiring people to buy back your time, focusing on calendar over capacity strategy, ensuring that you delegate tasks effectively to free up your time for more important activities.

What does the speaker mean by 'pain line'?

The 'pain line' refers to the point in business growth where expansion becomes painful, often due to the entrepreneur reaching their capacity to manage without delegating effectively.

What is the 'replacement ladder' strategy?

The 'replacement ladder' strategy is a method of hiring where you start by delegating administrative tasks, then customer success, marketing, sales, and finally leadership roles, ensuring that each level is established before moving to the next.

What is the '131 rule' and how does it apply to leadership?

The '131 rule' is a leadership principle where team members are encouraged to present one specific problem, three viable options they've considered, and one specific recommendation for resolution, fostering autonomy and decision-making at lower levels.

What is the speaker's view on the role of an entrepreneur in growing a business?

The speaker believes that entrepreneurs should focus on building an empire, which is defined as a life of unlimited creation, and not just on making money or selling their business.

How does the speaker define 'transformational leadership'?

Transformational leadership, as defined by the speaker, involves hiring for outcomes, setting clear expectations, measuring progress with a single number, and coaching team members through principles and personal stories.

What is the speaker's advice on handling issues with team members?

The speaker advises to coach team members by focusing on the violated principle, sharing a personal story related to the principle, and discussing the takeaway from the situation, rather than simply pointing out what was done wrong.

What is the '50 to fix it' policy mentioned by the speaker?

The '50 to fix it' policy allows frontline workers to solve any problem they see, costing less than $50, without needing prior permission, as long as they report it to their leader within the next seven days.

Outlines

00:00

🚀 Entrepreneurial Growth and Leveraging Skills

The speaker shares their journey to San Francisco to learn from young entrepreneurs and discovers the concept of leverage from Naval Ravikant. They emphasize the importance of time multiplied by leverage to achieve high output. The speaker identifies four master skills for creating leverage: capital, code, content, and collaboration. They discuss common pitfalls entrepreneurs face, such as stalling growth, self-sabotage, and the desire to sell their business at the first sign of difficulty. The speaker introduces the 'buyback principle' and the importance of hiring to free up time, advocating for a strategic approach to overcoming growth barriers and creating a scalable business model.

05:01

🛠 The Replacement Ladder and Empire Building

This paragraph delves into the concept of the 'replacement ladder,' a strategy for hiring employees that can take over tasks and allow the entrepreneur to scale their business. The speaker argues against the idea of a '4-Hour Work Week' and instead promotes building an 'empire,' which they define as a life of unlimited creation. They encourage filling newfound time with meaningful work to continue growth, rather than falling into a cycle of stagnation. The speaker also discusses the importance of mindset and the need to let go of tasks to others to create leverage, using Richard Branson's management style as an example.

10:01

🗂 The Art of Delegation and Leadership Development

The speaker focuses on the importance of delegation in leadership, advocating for delegating outcomes rather than tasks. They introduce the '131 rule,' a method for leaders to empower their team to solve problems and make decisions within a certain budget. This approach is designed to push decision-making down to the front lines, allowing for faster response times and growth. The speaker emphasizes the need for leaders to build people who can build the business, creating a scalable and efficient company structure.

15:02

🌟 Becoming a Transformational Leader

In this section, the speaker discusses the transition from transactional leadership to transformational leadership. They explain the process of coaching team members by focusing on principles, sharing personal stories, and extracting takeaways from experiences. The speaker stresses the importance of empathy and understanding in leadership, as well as the need to create a culture where team members are encouraged to take ownership of their responsibilities and contribute to the company's growth.

20:02

📈 Scaling Businesses Through People Building

The speaker concludes by emphasizing the importance of people building in scaling businesses. They argue that by focusing on building up individuals within the company, leaders can create a strong team that drives business growth. The speaker shares their philosophy of empowering frontline workers to solve problems within a budget and the benefits of this approach, such as increased speed and leverage. They also introduce the concept of '50 to fix it,' a budget given to employees to address issues promptly. The speaker encourages leaders to adopt a mindset of building people to build the business, ultimately leading to fulfillment and success.

Keywords

💡Leverage

Leverage in the context of the video refers to the ability to maximize output or results using a minimal amount of effort or resource. It is a core concept that the speaker uses to explain how successful entrepreneurs amplify their effectiveness. The video emphasizes that the best entrepreneurs have the 'biggest output for unit of time,' illustrating the principle with the equation 'time multiplied by leverage equals output.'

💡Pain Line

The 'Pain Line' is a term used to describe the point at which business growth becomes challenging and painful for entrepreneurs. It is a critical juncture where they may choose to stall, sabotage, or sell their business. The script mentions that most entrepreneurs reach a 'pain line' around 1.2 million in revenue or about 12 employees, where their life starts to get 'really painful,' indicating a need for strategic change.

💡Buyback Principle

The 'Buyback Principle' is a strategy the speaker introduces for entrepreneurs to regain control of their time by hiring people. The principle is about employing individuals not just to grow the business, but to 'buy back' the entrepreneur's time, allowing them to focus on high-impact activities. The speaker illustrates this by saying, 'we hire people to buy back our time,' emphasizing the importance of time management in scaling a business.

💡Replacement Ladder

The 'Replacement Ladder' is a concept that outlines a progression of hiring in a business, starting from administrative roles to executive leadership. It suggests a strategic approach to delegation, where the business owner gradually hands over tasks to others as the business scales. The speaker uses this term to describe the process of hiring employees who can take over responsibilities, allowing the business owner to focus on growth and strategy.

💡Transactional Leadership

Transactional leadership is a style where leaders tell their team members what to do, check their work, and then give them the next task. The speaker contrasts this with transformational leadership, suggesting that the former can lead to micromanagement and frustration. In the script, the speaker describes this style as one that can create a 'pain line' for entrepreneurs, where they are constantly dealing with small issues and firefighting.

💡Transformational Leadership

Transformational leadership is presented as an alternative to transactional leadership. It involves inspiring and empowering team members to achieve more than they thought possible. The speaker explains this concept by emphasizing the importance of hiring for outcomes and coaching team members to solve problems and grow. The video script illustrates this with the speaker's approach to hiring an assistant and defining clear outcomes and measures for success.

💡North Star

In the context of the video, a 'North Star' principle is a guiding light or a core value that helps in making decisions and setting direction. The speaker uses this term to describe the fundamental principles that should guide an entrepreneur's actions and decisions. For example, the speaker mentions a North Star principle about the calendar being a 'work of art,' indicating the importance of careful planning and optimization.

💡131 Rule

The '131 Rule' is a problem-solving framework introduced by the speaker. It stands for 'One Specific Problem,' 'Three Viable Options,' and 'One Specific Recommendation.' The rule is designed to encourage team members to think critically and bring solutions rather than just problems to their leaders. The speaker uses this rule to push decision-making down to the front line and build a culture of empowerment and accountability.

💡Empire

The term 'Empire' in the video is redefined by the speaker as a 'life of unlimited creation,' suggesting a state of continuous growth and innovation without the need to retire. It is used to inspire entrepreneurs to aim for a business that can sustain and grow indefinitely, providing a sense of fulfillment and purpose beyond just financial success.

💡Resourcefulness

Resourcefulness is highlighted as a critical skill for entrepreneurs to have, especially when capital is limited. The speaker mentions that while capital can create opportunities, it is resourcefulness that can truly drive success. The video script emphasizes the importance of being creative and finding ways to make things work with the resources at hand.

💡Coaching

Coaching in the video is presented as a method for leaders to develop their team members. It involves guiding individuals to understand principles, learn from stories, and derive takeaways that can be applied to their work. The speaker demonstrates a coaching approach that focuses on teaching rather than just instructing, aiming to create a deeper understanding and commitment to improvement.

Highlights

The importance of understanding leverage in entrepreneurship: Time multiplied by leverage equals output.

Identifying four master skills for creating leverage: Capital, Code, Content, and Collaboration.

The challenge of growing a business and the common pitfalls entrepreneurs face, such as stalling growth or self-sabotage.

The concept of the 'pain line' in business growth and how to recognize when to scale or delegate.

The 'buyback principle' for hiring, focusing on buying back time as a strategic advantage.

The 'replacement ladder' strategy for scaling a business by progressively hiring roles that create more time for the entrepreneur.

The significance of hiring an executive admin as the first step towards delegating tasks and creating leverage.

The transformational leadership approach, focusing on outcomes rather than tasks, to empower team members.

The '131 rule' for problem-solving, encouraging team members to come up with solutions rather than just problems.

The empowerment of front-line workers with a '50 to fix it' budget to address issues proactively.

The role of the CEO in setting clear outcomes and expectations for team members to drive towards.

The importance of coaching team members based on principles and personal stories to foster growth and understanding.

The concept of 'becoming the person you needed most in your darkest days' as a personal development goal.

The idea of sharing the best version of oneself with the world as a means of fulfillment and impact.

The ultimate goal of creating a life of unlimited creation and the mindset required to achieve it.

The emphasis on building people to build the business, highlighting the importance of people development in business growth.

Transcripts

I moved to San Francisco because I

wanted to understand how these

20-year-olds built billion dollar

companies and I meet a guy named nval

robicon 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 the ball taught me this

there's only four Master skills to

creating leverage once I understood this

I understood I only had four things to

go 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 can do that does that Mak sense

your dreams right this sound your dreams

have to be bigger than everybody else on

your team's dreams and goals write it

down so that's St 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 6 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

4-we

sabatical do you think a company that's

struggling the CEO of the company should

take a four-week sabatical yes or yes no

perfect you guys are on the same page

this 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 wey opponent this is going to shakee

me to become the person I need to become

to get to the next level instead Tracy

went on to sabatical 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 complex it

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 4-Hour Work week I ain't

here to do a 4-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 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 task 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

gotes sales anybody

else what do we got copyrighting

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 Versa 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

Den um I'm getting together with Richard

Branson in verbi Switzerland do you want

to join hm 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 cuz 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 in 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 impostor

syndrome it was so strong in that group

of people was Tim Ferris the 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 brain tree 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 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 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 watch 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 assistant 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 so level one you

might be feeling stuck in your business

is because you don't have somebody to

support you on your account and your

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 strangers request 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

at 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 is 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 okay

because if you don't do this I'll tell

you what happen 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 sales people 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 6

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 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 create 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 Etc because you're going

to give them a play

but 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 cter reinvest that now into

marketing they build a marketing

strategy they hire somebody 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

[Music]

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 stigs right I'm GNA I'm

going to take the dagger and just a

little bit more the other parts of this

is you're overpaid

and you kind of

suck okay a great executive ad admin

they're worth their weighting gold okay

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 cuz

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 okay so I

moved to San Francisco in 2008 this is

after selling my first company I became

a multi-millionaire at

27 and I it crushed me like I 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

was 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 entrepreneur 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

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 nval rant this is 2008 nval 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 qu question okay write this

down

okay time multiplied by leverage equals

output and output could be money

resources Etc 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 8020 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 system systems oo 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 the

all 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 res

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 C's write them

down once I understood this I understood

I only had four things to go 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

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 pissing 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 body 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 inboxing calendar

who's the CEO of my inboxing 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 asked them to describe

to me what does it mean to be the CEO of

my inboxing calendar is it my

responsibility to put stuff in my

calendar or yours mine yay we're wi you

know like it sounds foolish but I'm

trying to make 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 in

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 6 weeks domestic 2 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 mountain top see it right

there that's Mountain Top you figure out

how to get there what resources would

you need so then we

measure okay so then I explained 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 have a number my social media

person has a number my CFO has a number

my Coos have a number my CEO 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

it's 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 are 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 one's 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 an 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 um 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 cuz you guys

are friends of Carlos follow me on

Instagram Dam Martell TW Martell write

it down at Dam Martell 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

Northstar principles damn Martell is my

name in case you guys are the Northstar

principal 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 learn that

principle okay so if you let's take

something simple people have to show up

on time that does that bug anybody else

when people will show up late for

meetings perfect okay principle if

you're on time you're 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 principal 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 3

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 cuz it's at the

top so you think the problems 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 unte them this okay

so few years ago I the 131 Rule and I'll

tell you how it works is 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 a a 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 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 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 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: a.m. he texts me I'm

good duh like and I'll 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 research them

and then give me your one specific

recommendation if you teach everybody in

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 okay 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 they recommendation is what we

should do and over time they build their

confidence and I push down all the big

decision making to the front line okay

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 sh

share this

often Frontline workers I give them a

$50 budget to fix any problem they see

as 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 front

line they can solve any problem they see

if it's less than $50 without getting

anybody 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 7even 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 C my Coos is

$50,000 what did I just do I just

created a framework to push decisions

and issue problem solving down to the

front line 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 in 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 a

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 than you thank

you