The Lazy Millionaire: I Own 40 Companies, But Don't Run Any Of Them
Summary
TLDRIn this masterclass, Andrew Wilkinson shares his expertise on hiring CEOs for scaling businesses. With experience managing 40 companies, he discusses the importance of finding a CEO who can take a business to the next level, structuring compensation for alignment, and the crucial interview process. Wilkinson emphasizes the need for trust, the right fit, and the willingness to delegate fully to ensure the business thrives under new leadership.
Takeaways
- π Hiring a CEO can be a game-changer for scaling a business and allowing the founder to focus on other interests or projects.
- πΌ It's essential to find a CEO who has experience running a similar business, ideally one that was twice the size of your current business, to ensure they have the right skill set.
- π Conducting thorough due diligence on potential CEOs is critical to avoid costly hiring mistakes and to ensure a good fit for the company's culture and goals.
- π Transparency in the hiring process, including clear communication about the role and expectations, helps in attracting the right candidates.
- π° Structuring compensation for a CEO should involve a balance of base salary, bonuses tied to performance, and potentially equity that reflects a shared risk and reward.
- π€ Trust is key when handing over the reins to a new CEO, and founders should be prepared to let go and allow the CEO to lead without constant interference.
- π Entrepreneurs should consider hiring a CEO if they find themselves yearning for new challenges or if they're not fully invested in the day-to-day operations of their company.
- π Recognizing when it's time to bring in a CEO is crucial; it often happens when a founder is no longer the best person to lead the company due to changes in their interests or lifestyle.
- π Understanding a CEO candidate's 'hammer' or core strength is important to ensure it aligns with the company's needs and growth strategy.
- π‘ The hiring process should involve a combination of personal interviews, background checks, and reference verifications to get a holistic view of the candidate.
- π For businesses that can't afford high recruiter fees or extensive background checks, creative and resourceful DIY methods can be employed to find and vet potential CEOs.
Q & A
Why did the host invite Andrew Wilkinson to the masterclass?
-The host invited Andrew Wilkinson to share his experience and knowledge on hiring CEOs, as he has successfully scaled multiple companies and currently oversees a portfolio worth $500 million without being directly involved in day-to-day operations.
What was the host's initial hesitation about hiring a CEO?
-The host was hesitant because hiring a CEO felt like giving up control of something he had built from scratch. It seemed easier said than done to find someone trustworthy to take over and grow the business.
What is Andrew Wilkinson's approach to finding a CEO for his companies?
-Andrew looks for individuals who have run a similar business that is double the size of his own, often targeting number two executives who have been eager to step up to the CEO role but haven't had the opportunity yet.
Why does Andrew prefer hiring number two executives to be CEOs?
-Andrew finds that number two executives, who have been part of a similar business and are eager to become CEOs, are often highly motivated and capable of taking on the new challenge of running a company.
What is the 'Hammer' concept mentioned by Andrew, and why is it important?
-The 'Hammer' concept refers to a CEO's primary skill or approach to growing a business, such as marketing, sales, operations, or finance. It's important because it indicates the CEO's likely strategy and whether it aligns with the company's needs.
How does Andrew ensure that a potential CEO is a good fit for the company?
-Andrew ensures a good fit by checking for trust and alignment with the company's strategy, observing if the candidate is genuine and not overly slick, and assessing whether they are willing to have skin in the game with equity or other forms of risk-sharing.
What is the significance of the 'rider on an elephant' analogy used by Andrew?
-The 'rider on an elephant' analogy signifies that once a CEO is hired, they will lead the company in the direction they believe is best, much like an elephant follows its own path despite having a rider. This highlights the importance of strategic alignment during the hiring process.
Why does Andrew emphasize the importance of walking away after hiring a CEO?
-Andrew emphasizes walking away to empower the new CEO and to avoid undermining their authority. Constant interference can lead to a lack of trust and confusion among the team about who is truly in charge.
What is Andrew's view on using recruiters for finding a CEO?
-Initially skeptical, Andrew has come to appreciate recruiters as they broaden the search spectrum, save time by conducting initial screenings, and can find candidates that might not be on his radar.
How does Andrew handle the transition period after hiring a new CEO?
-Andrew believes in a quick transition, often leaving the company's communication platforms and reducing contact to set check-ins, allowing the new CEO to establish their leadership without interference.
What advice does Andrew give regarding the structure of a CEO's compensation package?
-Andrew suggests structuring the compensation with a base salary plus bonuses tied to performance goals, potentially with capped bonuses for exceeding targets. He also prefers candidates who are willing to invest in the company's equity, showing a shared risk.
Outlines
π Masterclass on Hiring a CEO
The speaker introduces a masterclass with Andrew Wilkinson, an expert in hiring CEOs for his 40 companies worth $500 million. Andrew's unique approach to finding, interviewing, and compensating CEOs is discussed, emphasizing the importance of hiring a CEO when you're ready to delegate and scale your business. The talk will cover the process of identifying the right CEO, structuring compensation, and ensuring alignment with business goals.
π€ The Realization of Hiring CEOs
The speaker reflects on the realization that overseeing CEOs might not be for everyone, requiring a specific personality type that prefers high-level delegation. Andrew shares his personal journey, from being 'Teflon for tasks' to delegating the running of his businesses. The discussion highlights the importance of understanding whether your business is at a stage where hiring a CEO is viable and beneficial.
π οΈ Assessing Business Readiness for a CEO
The focus shifts to assessing whether a business is ready to hire a CEO, with criteria such as product-market fit and profitability. Andrew suggests that a business should be making around $300,000 in profit to afford a CEO and incentivize them with bonuses tied to business growth. The conversation delves into the mental preparedness required to let go and trust a CEO with your business.
π Finding the Right CEO Candidate
The speaker discusses strategies for finding a great CEO, including looking for individuals who have managed similar businesses at a larger scale. The importance of understanding a candidate's 'Hammer' or primary skill set is highlighted, as well as the value of using recruiters to broaden the search. The paragraph also touches on the benefits of hiring a 'number two' from a similar company.
π€ Trust and Empowerment in CEO Hiring
The importance of trust and empowerment when hiring a CEO is emphasized. The speaker shares insights on ensuring cultural DNA alignment and avoiding 'big company' candidates who may not adapt well to smaller businesses. The discussion also covers the significance of a CEO's willingness to take risks and have skin in the game, aligning their interests with the business's long-term success.
π The Art of Transitioning to a New CEO
The speaker discusses the challenges of transitioning to a new CEO, comparing it to passing a baton in a relay race. The advice given is to make a clean break and allow the new CEO to take charge, emphasizing the importance of not undermining their authority. The paragraph also touches on the emotional aspect of letting go and the potential for a business to thrive under new leadership.
π CEO Performance Monitoring and Mistakes
The speaker addresses how to handle a CEO's performance, including setting boundaries for acceptable mistakes. The importance of establishing clear financial controls and communication guidelines is discussed, as well as the need to assess whether a CEO is contributing positively to the business amidst potential external challenges.
π΅οΈββοΈ Rigorous CEO Candidate Diligence
The paragraph delves into the importance of thorough diligence when hiring a CEO, including the use of former CIA agents for background checks. The speaker shares tactics for verifying a candidate's claims and experiences, emphasizing the high cost of a bad hire and the value of deep reference checks.
π€ Negotiating CEO Compensation Packages
The speaker provides insights on structuring compensation packages for CEOs, advocating for a high-variable, low-base approach tied to performance. The discussion includes strategies for negotiating equity, with a preference for CEOs who are willing to invest in the business, reflecting a shared risk and commitment to success.
π Keys to Successful CEO Hiring and Management
The final paragraph summarizes key takeaways from the masterclass, including the importance of finding a CEO with the right 'Hammer' for your business, conducting thorough reference checks, and allowing the CEO autonomy to perform their role effectively. The speaker also mentions a PDF checklist on hiring a CEO available through their newsletter, offering further guidance on the topic.
Mindmap
Keywords
π‘CEO
π‘Delegation
π‘Portfolio
π‘Compensation
π‘Alignment
π‘Founder
π‘Recruiters
π‘Product-Market Fit
π‘Hammer
π‘Diligence
π‘Transition
Highlights
The importance of hiring a CEO when you no longer want to run your company but don't want to sell it either.
Andrew Wilkinson's experience with scaling multiple companies and the value of delegating to CEOs.
The concept of 'product-market fit' as a prerequisite for hiring a CEO and ensuring business scalability.
The financial threshold for considering the hiring of a CEO, with a business needing to be profitable enough to support the role.
The psychological readiness required to let go of control and empower a CEO to make decisions.
The strategy of hiring a CEO who has experience running a business of similar size or industry.
The use of recruiters to broaden the search for potential CEOs and the benefits they bring to the hiring process.
The importance of aligning with the CEO's strategy and understanding their 'hammer' or primary skill set.
The necessity of trust and 'gut feeling' when interviewing potential CEOs and the red flags to watch for.
The process of transitioning to a new CEO, including the importance of a clear handover and stepping back.
The potential downsides of hiring a CEO, including the risk of misalignment with company culture or strategy.
The role of background checks and due diligence in avoiding bad hires and ensuring a good fit.
Negotiating compensation packages for CEOs, emphasizing the importance of aligning incentives with business growth.
The challenges of letting go and allowing a CEO to make mistakes, setting boundaries for acceptable risks.
The benefits of in-person meetings during the hiring process to gauge chemistry and trustworthiness.
The value of a CEO's skin in the game, with discussions on equity and investment in the business.
Andrew's personal approach to scaling businesses and finding the right balance between involvement and delegation.
Transcripts
all right this is a guest master class
with our buddy Andrew Wilkinson we're
inviting him on because if your world
class is something I want to learn from
you in fact I had emailed Andrew a while
back being like hey I have this company
it's working we had scaled into the tens
of millions in Revenue but I just didn't
want to run it anymore I was tired I
wasn't the right guy for it I was half
in half out and I was just fantasizing
about selling it or the day where I
wouldn't be running it anymore and he's
like dude you need to hire a CEO and to
me that always felt like something
that's easier said than done hire a CEO
just find somebody to take over my baby
but he's done it this guy's got 40
companies he's got a CEO that runs you
know CEOs that run them he doesn't have
to run any of them day-to-day the
portfolio is worth $500 million so if
there's anybody to learn from it's
Andrew on this and so he comes in and he
shares uh how are he interviews them
what are the questions that he asks who
is he looking for um how does he
structure the compensation so he's very
transparent about you know how he
structures it how much is base comp how
much is variable how to make sure
everybody's aligned uh what to do after
you hire them and so we go into step by
step how to hire a great CEO for your
business this is not for a beginner if
you don't even have a business You'
never done this this not for you this is
for people who actually have a business
and they're scaling it up and maybe it's
year five it's year seven and you're s
starting to realize you don't want to do
this for another five to 10 years and
this that's when you have to have this
conversation to figure out how you can
hire a great CEO to scale your business
it worked for me it's work for Andrew I
hope it works for you so enjoy this
guest master class with Andrew r
[Music]
okay we asked Andrew Wilkinson to come
on and do one specific thing which is
teach us how to hire CEOs he owns Andrew
you own what 40 companies now the total
portfolio is worth almost $500 million
and yet you're a pretty chill guy
whenever I text you you answer you're
always having fun you're not stressed
out overloaded overworked like every
other CEO I know who's a have one
company but you have 40 and so I think
the way you've been able to do that is
by hiring great CEOs for all your
companies and it's actually worked me
and Sam want to learn this from you so
you're here today to teach us that how
did you even realize that you needed to
hire CEOs yeah so I would say um it's
not that it's less it's not less
stressful it's just different right so I
just have different problems so someone
running a company might be uh you know
putting out a fire that's that's burning
that day I put out fires that burn over
the course of a month or two and they're
bigger fires and then someone else might
spend a lot of time dealing with company
politics I end up dealing with um you
know CEO comp packages so I want to say
to begin with you know this is not
necessarily A Greener pasture it's just
a different pasture um and I think it
you you really only want to oversee CEOs
if that's your skill set if you're drawn
to um being super super high level and
hands-off which some people let's be
real they're not they're they're like
they want to be jro from Juro Dreams of
Sushi they don't want to be the guy who
starts Chipotle they want to be on the
line they want to be making food uh And
So It ultimately comes down to your
personality and for me my personality
has always been I'm incredibly lazy so
from the time that my mom told me to
wash the dishes I was Furious I was
always trying to find ways to you know
pay my brothers to do it find uh you
know systems to wash the dishes more so
I had to do less work and so I always
joke that I'm Teflon for tasks and if
you start delegating in your company
which most great entrepreneurs do you
ultimately reach this point where uh you
ask yourself well is there anything else
I can delegate and that final level of
Delegation that final level of
abstraction that's hiring a CEO that's
hiring one to hire 10 they go and they
run the entire company and you just talk
to them quarterly sometimes annually and
there's some CEOs I have that I haven't
even talked to in two or three years you
have something between 30 or 40
companies do you have 30 or 40 CEOs
reporting to you no the way that we do
it now so it's crazy at first it was
like five companies so I had five direct
reports uh that are CEOs no big deal and
then over time as we've scaled up we've
had to form operating groups and so we
have these operating groups and they
have their own CEOs who report into us
so for example all of our Digital
Services businesses are run by a guy
named prep I meet with prip kind of
bi-weekly monthly whenever I need to uh
and he oversees a group of like six
companies even if you're not going to
end up with that kind of portfolio 40
company structure I've had this with you
which is I think a more common problem I
remember emailing you saying hey I have
this G business it's working so I can't
there's no there's no reason to shut it
down however I don't want to keep
working on it I liked it at the
beginning I don't love it now I want to
go on and do new things how do I do this
do I have to sell this like should I
just sell the company do I can I hire
zoo and if so where the heck am I going
to find somebody who I could trust to do
this so even on a one company level I
think that's where most Founders are
going to be that uh you know Step One is
abstract yourself out of a single
company so let's let's start with that
you you said something you're like it's
pretty common everyone loves their
business in year one I forgot what's
your exact quote so yeah every time I
talk to a young founder they're like I'm
going to run this till the day I die
doesn't matter what the business is they
think they're going to be you know there
like Mark Zuckerberg for 20 30 years and
then you talk to them in years seven or
eight and almost all of them are just
like how do I escape this hellish waking
nightmare like want to be I'm gonna run
this till I'm 28 till the day I'm
28 totally so and it's really
interesting because um people generally
think about it in a very binary way
they're like okay there's two doors door
one keep running my company door two
sell get rich and live on M Island right
uh but there's actually a door three and
door three is hiring a CEO right so
you're you're in a marathon and you can
either ditch the marathon or keep
running it well it turns out that you
can actually incentivize someone else to
keep running the marathon on your behalf
and I mean this just goes back to what I
was talking about before right so
there's there's all these different
levels of Delegation and we all
understand at least if you're a good
entrepreneur that if you don't like
accounting you just hire an accountant
well if you don't like running your
company door three is you just hire a
CEO so you know my my story on this is I
started metalab which is a design agency
uh about 20 years ago I feel very old to
say that but about 20 years ago um and I
ran it for as CEO for almost 10 years
and I had a great exec team like I was
able to delegate quite a bit of it I was
running other companies at the same time
but ultimately the buck stopped with me
and for the first three to five years it
was really exciting like I was learning
new skills all the time I was scrappily
like you know sending the invoices and
negotiating deals with clients and I was
flying all over the world and it was all
new and and exciting but you know at a
certain point you know after like year
eight year nine I didn't want to fly to
San Francisco anymore I didn't want to
have to like shake hands and kiss babies
and do that and I remember Chris my now
business partner and at the time CFO
would come to me and be like dude you
got to fly to San Francisco every time
you go down down there you Clos like a
million dollars of new projects but I
didn't really want to do it because a I
was exhausted it wasn't new anymore I
didn't want to travel it didn't suit My
Lifestyle but also I was already rich I
was already making enough money and so
the business was kind of starting to
Plateau because I wasn't willing to go
that extra mile I was just saying you
know what we'll just do whatever comes
in I'll do a San Francisco trip once a
quarter and we'll close what we close
because I don't want to do that well the
beautiful thing was
there were young Scrappy people who to
them the idea of flying to San Francisco
and taking a client out for a steak
dinner was a dream come true they'd
never done that before and so for me I
was looking at it and going okay um
running a five person agency versus a 50
person agency it's a very different job
and it was a job that I sucked at you
know I really to this day love running
five person companies I love running you
know I can get to about 15 people
comfortably
um but I I wasn't enjoying it when we
were 50 people and I read every book
about management I did courses and I
just kind of Whi myself why am I not a
great manager why can I not be like
Peter Ducker reincarnate and so I would
always just fantasize about selling and
I I kept trying to sell the business and
then we'd be like right at the last
month and then the uh the buyer would
change the terms or something would go
wrong in the business and so so I was
kind of starting to lose it I didn't
want to be running my company I wanted
out but I I I couldn't sell it and so
around that time I ended up reading a
book about Warren Buffett and I found
out about door 3 and here we are I
started hiring CEOs I made a ton of
mistakes which I'll talk about but it's
it's enabled me to create tiny which I
never would have done before I'd
probably still be either miserably
running my business or I would have sold
for you know a much smaller amount of
money and we'll get into like the actual
tactics really quick though the green
pasture thing youing it's always Grass
Is Always Green on the other side and
like you and I joke where you're like uh
well I don't want to say what you said
but you'll just like be teasing about uh
running a small company and how that
could be way more fun and being the CEO
of a small company uh for a long period
of Time Versus trying to like go big
what's the grasses Always Greener for
you all right everyone really quick if
you've heard this podcast before you
know that Sean and I think that the most
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we went through all of the podcasts that
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well I mean I think
um I there's a great Bob Seager quote um
which is I wish I didn't know now what I
didn't know then right so for me I I
think think about it like this I might
have given this example before but
imagine if you love chopping wood right
you just do it because it's fun you're
in your backyard chopping wood and then
your neighbor pokes his head over the
fence and says hey dude can I get a qut
of wood I'll pay you for it and you
realize oh my God this is a business
I've taken my passion and I've created a
business and now I'm selling wood door
Todo I'm working with my five best
friends it's a blast right I'm suddenly
making money I can afford to go to the
bar life is good and then you Flash
Forward 20 years and you wake up and
you're a lumber magnate you own five
Sawmills and all you do every day is you
sit in a little air conditioned box
looking down at the the floor you have
all these robots working for you and all
these hundreds of employees and most of
your time is spent doing doing Excel
right I think that is the sadness of
building a large business and delegating
your hands are not on the tools anymore
and so for me what's been sad about
building the machine is I've built the
machine that's freed me to do what I
want but the irony is I end up doing
things I don't want as a result because
ultimately I was a designer I loved
putting on headphones and being in
Photoshop and designing websites and
writing and so for me it's been
searching where do I get the flow state
that I used to get running a five person
compan let's let's roleplay it here so I
have a company I want to hire Ace I I've
realized I can do this third door and
I'm like you know what that's the right
move I should hire a CEO but where the
heck am I going to find a CEO that I
could trust that's going to not only not
ruin it but actually you know hopefully
grow the business in some way what's the
what's step one so step one you have to
really assess is your business big
enough right is this the right thing is
this the right time so ultimately you
want to ask does your business have
product Market fit and can it actually
afford a CEO right is this uh is this a
corner store like where it's kind of an
owner operator kind of business where
you just kind of have to run it and if
you leave all the profit gets eaten up
by somebody else or is this something
that's really scalable so I generally as
a rule of thumb will say you probably
shouldn't hire a CEO until your business
is doing $300,000 or so of profit and if
it is that means that you can swap
yourself out and you can afford to hire
someone a reasonable based salary and
then you can incentivize them to grow
the business business and so one of the
one of the really interesting things
that people kind of obsess over is they
say well you know a CEO could cost
500,000 my business is only doing $3
million and $300,000 of profit and what
they kind of Miss is that generally a
CEO has paid a base salary but most of
their comp comes from bonuses and the
bonuses are based on the business
growing and so it's one of those things
where it's like if your business is
doing 300K of profit you can basically
take two or 300 K of that invest it in
the base salary for the CEO and then all
of their additional comp will come from
the growth of the business and so you've
align them with your goals so first
thing is my B business big enough so you
said two two criteria product Market fit
meaning we we know what the hell we're
doing we're not in the figure it out
figure out the product figure out the
market uh figure out the what is the
offering and changing that every three
weeks because it's not working like you
have a reasonable continuous cycle of
supply and demand for what you're doing
and then said profit around 300,000 as
the kind of that's the minimum bar I
would say so in there I mean
occasionally you can let's say you've
got a friend who's super Scrappy who
wants to sink their teeth into something
and you've got a small business that's
like a I always call them like an ember
it's not really a fire yet it's an ember
and someone needs to come blow on it you
could do that but I think there's a lot
more risk there you really want a
machine that's operating you want a car
that can drive on the road um before you
put someone in and then the other
question is can you make someone Rich
right because ultimately people who are
good great exceptional CEOs they're
looking for opportunity and upside and
by Nature the fact that they're a Hired
Gun CEO tells me they're not necessarily
an entrepreneur they don't want to take
total risk they want a nice salary they
want bonuses they're not necessarily
willing to risk at all but often they
want to know they can get rich in a in a
CEO way so they can make singled digigit
Millions for the first time ever uh if
everything plays out or maybe they can
get a big payout if the business sells
or gets to a large scale or whatever it
is but ultimately you want to know that
you can make someone wealthy with it and
so we'll do the exact comp stuff in a
minute but the second question you have
so first was is the business big enough
and do we have prod fit then you also
said to me once like are you willing to
walk away I think there's a mental side
of it too are are you ready to hire a
CEO yeah and that's really hard I mean
you know do you I remember I got to the
point where I fantasized about giving
the keys away to someone else and when I
finally did I was elated you know but
there's a lot of people who aren't like
that I can think of one of my friends to
him his business is his baby and when
people mess with his baby he gets really
angry and he doesn't like it and so you
need to be willing to walk away and
effectively look at it this way as
entrepreneurs we all we're all birthing
these these uh business babies and now
you're giving them to a foster parent
can you tolerate that you know can you
cope with that someone else parenting
your child because that's really what it
is and not only that but you have to be
disciplined for it to work you need to
either be all in or all out you have to
empower this person you can't be sitting
there looking over their shoulder so I
think those are the two kind of
fundamental questions to this right are
you are you is your business big enough
and are you willing to walk away but but
when you're accepting the when you're
saying all right I'm going to walk away
is it I'm walking away because this
person's going to to make everything
greater than I could or are you walking
away thinking to yourself I know it's
not going to be as good with me in it
but it could be 80% as good and I won't
have to worry about it well let let me
put it this way the let's say that
you're an exceptional product person
you'll know the product won't be quite
as good because generally people who are
good at marketing and sales and
operations and finance are just not as
good at product so you're going to
sacrifice on the product side a little
bit but you're going to know the
business itself will be so much
healthier and grow um at least from a
financial measure I found that going
from being a checked out founder
operating your business reluctantly to
somebody who's highly incentivized for
growth who's excited to do it almost
always the business like doubles in the
first year I've been astounded by how
much I had been holding back my business
yeah that's a great question great
answer that seems pretty consistent with
what I've heard a Founder the other day
was telling me after maybe 8 nine years
of running his business he hires a CEO
he plans to stick I'm hey I'm here I'm
available for the next year transition
he's like yeah they haven't called in a
little while um you know we be we beat
our numbers which I wasn't able to do
the last three years and uh everything
seems to be going really well turns out
uh turns out they didn't need me as much
he's like little hit to the ego but also
wait isn't this exactly what I wanted
and um you know he was he was sort of
pleasantly surprised on the upside from
there so let's talk about finding the
right person how do you actually find a
great CEO what do are you looking for so
generally I like to I like to find
someone who's run a same or similar
business that's double the size so let's
say I have an e-commerce brand um
selling candles well I I don't
necessarily need to go find a CEO um
who's run a candle business before but I
want to find someone who's sold a
similar product online and I will
generally think about who are my who are
my competitors or what companies do I
admire and then I'll go on link in and
I'll just look for um president coo um
sometimes CEO but usually I will recruit
a number two and it's that person who's
been eagerly awaiting getting you know
kned as the CEO and they haven't stepped
up yet uh I find those are wonderful
people to delegate the business to uh
and then separately recruiters and
that's a topic we can dig into people
have a lot of opinions I had a lot of
opinions about uh recruiters that I've
actually changed over time but yeah you
got I I find broadening the Spectrum
with recruiters can be really helpful we
have to get a quick shout out to Ty
Burke my old roommate and someone I used
to recruit and I know you Ed them as
well you also use like crazy amounts of
uh uh reference checks so here's what we
do so we buy the business and as we're
buying the business we start asking the
question as soon as we know we're going
to buy the business or we're going to
delegate we we hire a recruiter
immediately now recruiters really pissed
me off before it was like real filters
where I'm going like man why am I paying
this guy $100,000 to open a door for me
I can just go on you know like Zillow
and find the the the house I want to buy
and here's this middleman charging a lot
of money and I kind of felt like why
would I pay some guy to go on LinkedIn
and message A bunch of people for me I
can do that myself but I realized that
I'm distracted and when I need to hire
someone I will often just go on LinkedIn
or whatever for 10 minutes I'll text a
bunch of my friends I'll try and think
of people that I have like in an apple
note that might be a good CEO I'm not
going Broad and so basically um I've
come around on recruiters there's some
really exceptional recruiters like Ty
Burke who um from search Partners who
Sam introduced me to he's one of my
favorite we also really like Matt
Hollingsworth from Al line um and what
the way I use a recruiter is just to
broaden the Spectrum so even if I'm
going to go on LinkedIn myself and look
for someone I'm might end up bringing
the person to the table who we end up
hiring we now have somebody who's um
reaching out to people I never would
have spoken to and then they're also
handling a lot of that administrative
work of pushing the process along
they're doing the initial interview and
one really fascinating thing I didn't
contemplate before is a recruiter saves
you an insane amount of time let's say
that you have 10 candidates for CEO and
every single one of those candidates
you're going to have to do a zoom with
and that'll take 30 minutes to an hour
well I think we all know we you've all
had that experience where you interview
someone and in the first 30 seconds you
know they're a dingus right and then
you're just desperately thinking like
okay how can I get off the phone as
quickly as possible not waste time but
not have this person think I'm a total
[Β __Β ] and so now I have the recruiter
do that call and I get them to record
the zoom and then I just watch the first
couple minutes and if I'm vibing with
the person then I'll move them on to the
next stage so if think about from that
perspective your time is highly valuable
and you've just saved 10 hours of time
what is that worth I think a lot and
then in some instances um we've actually
hired uh people that we brought in
that's fine and I just pay the recruiter
anyway but in other instances they've
brought people in that we never would
have found so the guy that runs
Aeropress Gerard Meyer we found him via
Tha and he was a guy where uh he had run
Soda Stream us and he just wasn't on my
radar whatsoever and he's one of our
best CEOs so I kind of look at the
recruiters as a time-saving mechanism um
they broad note the the people you look
at but ultimately it's just like a tax I
pay to have someone else be incentivized
to push everything along um and so I'm
actually a big fan of recruiters now but
you got to use the right people I find
there's a lot of terrible recruiting
firms and we've used a lot of really bad
ones over the
years and the recruiting firm uh what
are they running you so usually it's a
percentage of first year salary I think
it's about 20% so you know when you're
hiring a CEO and you've got total comp
of you know 300 Grand 500 Grand it can
be expensive um but I think it's worth
paying for if you can find the right
partner on it and you mentioned uh
looking for a number two who's run a
similar sized or similar uh similar
industry company um here's what I take
that to me you tell me what I what I
miss let's say You're The Candle Company
you don't need somebody who's run a
Candle Company tox the size but maybe
you want e-commerce you want it maybe
where Facebook was their primary Chan
sales Channel maybe you want uh
something like candles like maybe
selling to the similar customer base or
a one-time onetime purchase product not
something that's you know a total
different kind of like buying psychology
um is that right just first on that part
yeah you want someone who understands
roughly how the customer thinks and then
also the channels by which that product
is sold right so one one fascinating
thing I'll add to is when I'm
interviewing them I always ask myself um
what is this person's Hammer right so
there's that great quote to a man with a
hammer everything looks like a nail and
what I've seen with with CEOs is their
Hammer is either Marketing sales
operations or Finance right they go to
one of or or product they go to one of
those things and you know to the product
person we released the most beautiful
product in the world and if you build it
they will come to the salesperson it's
let's build a 50 person uh Enterprise
sales team to the marketing people it's
we're going to spend a million dollars a
month on Facebook ads so you want to be
listening incredibly carefully to what
is the mechanism by which they grow
companies because usually that's the one
if they did it at their last company
they're probably going to try and repeat
it right and so what you want them to do
is when they look at your company they
go oh my God like this is so easy I've
done this a million times before I've
taken businesses from a million dollar
in sales to $10 million in sales and
I've done that you know between one in
five times in a similar business so at
this point are you just constantly
collecting people I mean is that kind of
how you look at your job is I'm just
always I mean because if you're having
to talk to all these people constantly
and you have 40 companies that's like
pretty much all your
time I'm always thinking about that I
mean my worst fear is we're going to be
recruiting for a CEO role and I'm going
to forget about that guy I met at that
conference you know five years ago or
whatever so Chris and I have a Apple
notes that we share and we just keep
writing down names of people we think
are interesting that are Executives
sometimes or even within our companies
it'll be people that are come up and
coming in one of our other businesses
that we've thought might be a good CEO
for another business um but yeah I'm
always trying to scan the Horizon for
people who are um smart and I can bring
in but interestingly often it is every
process is different and and when we
hire a recruiter um only like 20% of the
time is it someone uh now that we've
brought in often it is someone that they
go Source I love the uh what's their
Hammer question uh because it's so true
that the the more experienced somebody
gets and the more successful somebody
gets they start to develop this hammer
and they try to they go run around
looking for for ways that they can apply
that thing they know to everything
whether it's the right thing or not um I
think this is a good thing and a Bad
Thing uh I've seen the same advice given
to kind of um YC type of companies or in
Silicon Valley where when you hire a CEO
if you hire a CEO That Grew their
previous Company by creating a giant
sales Army but you're trying to do
product Le growth it's a total mismatch
you might say oh wow they grew that
company from 10 million to 200 million
and that sounds good but if they did it
in a way that's totally different than
yours very few people can repeatably
grow businesses using totally new
methodologies for sales and marketing
and I'm ious also what's your Hammer
like uh if if you're a man if you're a
man with a hammer running around what
what is yours well I would say I'm a man
with a lot of different hammers um I've
gone really broad now because I've seen
so many different ways of growing
businesses and I think um I have a lot
of tools in the toolkit my old Hammer
was product I would always just be like
oh my go actually you know what I do
have a hammer okay so so my old Hammer
was product so I would always do Field
of Dreams marketing I would say we're
going to build the best product in the
world I'm a designer you know I was
really proud of what we're doing uh and
that'll solve everything and I realized
that really doesn't work very well and
now I would say my hammer is finance so
uh or operations so really what I'm
doing is I'm looking at a business I'm
going if one if we could just change one
thing what would that one thing be that
would give the business leverage and
often it's something really simple it's
like oh pricing right or they're just
not selling ads properly something
really boring and to to be honest I feel
a little depressed as I say that because
you're a sellout bro you're a sellout
the designer from 20 years ago would be
really sad and I still love don't get me
wrong like so when we bought let me give
arero press as an example I I just
unboxed our new Aeropress clear and I
just checked out the designs for a
couple unreleased products and that was
the best day of my month right I love
building great products I love being
involved with that knowing that if we
hadn't bought that business that
wouldn't have happened but when we
bought Aeropress the boring assumption I
made was I'm just going to do really
good um online marketing and e-commerce
it's really simple they didn't sell
online that was my one Insight that was
my hammer on that deal and now the bonus
the gravy is we get to do amazing
products and I get deserve you got you
you need to go throw away your Herman
millich chair and your Birkenstocks and
go put on a vest you nerd you're no
longer I know I know I know I know I
want to self flatulate so I want to I
want to talk about though um some of the
things you have to accept about hiring a
CEO and also when you interview a CEO
what you want to look for um because I
think that's probably one of the most
important things one of the so to go
back to this whole Hammer thing so when
I interview a CEO I'm looking for
whether or not I not along when I when I
interviewed Gerard for from apress he
told me what he wanted to do with the
company and I already had a lot of those
same thoughts and I was nodding along
and going oh my God he's putting it
better than I ever could and the reason
that's important is because when you
hire a CEO you are a rider on an
elephant right so when you're a rider on
an elephant the elephant is going to go
anywhere it wants and you're just stuck
you can't tell an elephant where to go
it's way bigger than you and ultimately
it's going to follow peanuts wherever
wherever wherever it wants to go and so
it's really important that you agree
with their uh strategy and one of the
ways that this has failed for us is I've
loved the CEO candidate and they've said
something like uh Hey I was looking at
the business and I really think we need
to go hard into Facebook ads and I would
kind of scratch my head and go well we
already kind of tried that I was kind of
thinking more this is like an email
marketing um you know marketing strategy
that we should deploy and they would all
always just double down right whatever
they say the first time is usually what
they're actually going to end up doing
and they're just going to use their
Hammer um so that's incredibly important
is having that alignment and the fit
with what else are you looking for in
that interview not along what's their
Hammer what else so I mean the most
important question is do you get the
creepy crawlies after you walk away do
you feel in any way any cognitive
dissonance any weirdness does your
stomach feel off
um you know you someone could be
incredibly Charming I often get this um
you know Psychopaths for example they're
very Charming people they are wonderful
to hang out with but you might walk away
and be like there's just something off
like something in their eyes or have you
had that yeah yeah and I'll tell some
stories um but I think the most
important thing is you know would you
let them babysit your kids right I think
like you know either you guys I would
let you babysit my kids right but and
that's important you're going to hand
over your company your baby to this
person so you have to have profound
trust and so often Chris and I we look
for people who are real um so they can
be I don't like slick people I like
people who their armpits get really
sweaty in the interview I like people
who get kind of nervous and scratch
their face when you ask them hard
questions I want to see that someone is
a human and when things get tough they
will want to do the right thing um and
so that's that's like really critical um
you know do you walk away energized
right you can really like somebody but
if you don't walk away energized um you
know that's that's not great and then
also are they down to have alignment are
they down to have skin in the game
because ultimately you know the worst
type of CEO would be this so let's say
Sam's hiring someone to run Hampton and
uh they say I want a million dollars a
year based salary and you're like okay
well you know could we do some bonuses
do want Equity how could we create
alignment and they just want like
lowrisk cash guaranteed that's not
someone you want to be working with you
want someone who is willing to have skin
in the game and risk with you and work
on the long term and there's a lot of
very shiny fancy Executives that
basically want zero risk and they just
want to make a [Β __Β ] ton of money and you
got to avoid those people like the
plague have you found any correlation
between um age or where they live like
if they're from a Silicon Valley Company
New York company middle of America or
wherever the equivalent stereotype is of
Canada well I mean I wouldn't say that
there's anything about uh where they're
from or even what they look like or how
they dress or anything like that
although I'll talk about that and the
importance of matching your cultural DNA
with their DNA but the number one thing
is the big company people right you you
really don't want the flashy person
who's got the the you know the LinkedIn
with five years at Accenture followed by
IBM followed by you know whatever
executive role I find that when you take
a big a big company person and you put
them in a smaller company they just
don't know how to function they're not
bad there's nothing wrong with those
people they just don't know how to
function they're used to having like you
know an army of people doing everything
for them and it's kind of like um I
always think about it like restaurants
so let's say that you have um you hire
let's say you have one restaurant with
no systems and you go and you hire the
chain restaurant let's say you find a
guy who runs like an olive garden and
you're like oh my God this guy really
understands how to run like a tight
tight ship and all the systems and stuff
you put them back in um you know your
restaurant and they're like well I don't
know how to build the systems I didn't
do this I just go to my handbook my
Olive Garden handbook and they tell me
how to do everything so you kind of get
that in big company people so you got to
avoid the big company folks one Nuance
that you didn't say but I'm pulling out
is you want somebody who's run a company
2x the size not 20x the size you would
think 20x is better right no no it's not
actually better 2x is kind of The Sweet
Spot of what you're looking for is that
correct totally well there's this funny
uh I I think of it as like there's a a
variety of different skills and if you
let's use Chipotle for some reason I
always go back to Chipotle but um think
about this so there's the guy who
invented the burrito right that's that's
kind of like if you think about it
that's like the founder of the founder
right then there's Steve 's the guy that
started Chipotle he went hey burritos
are a great food let's scale this up
let's turn this into a fast casual
concept then there's someone who came in
and scaled it to a bunch of stores right
I think that was still Steve that's a
kind of a different skill set he went
from one store to say 20 stores and then
they scaled it to like thousands of
stores and then they managed a public
company these are all different skill
sets right each of those levels are some
uh you know a whole different set of
skills right the guy who invented the
burrito is very different than the
person who would be great at scaling
Chipotle to a th000 stores and so I
think you really just want to be
accepting of you're you're almost
running a um what's it called like a you
pass the Baton what what is that a
marathon a relay race yeah and so you
might say the person that you hire the
CEO you hire to take your business from
two to 10 million you know what at 10
million you're probably going to bring
in some new person to run the company
then and they're going to know their
scale and then you keep going through
this and occasionally you're going to
get people who read a lot and learn a
lot and are highly adaptable and can
keep going but usually you know a CEO is
really effective for between five and 10
years and every once in a while you get
the the special cases that can go the
distance and even those exceptions even
Mark Zuckerberg who's been running
Facebook for 20 plus years he has Cheryl
and Cheryl does a bunch of stuff so that
he can keep inventing their next burrito
he's like oh great I'm going to focus on
AI I'm going to focus on metaverse and
somebody else will do you know ad
operations at this point because that's
not what I want to be scaling up or the
Google guys did the same thing with Eric
Schmidt right they bring they brought in
effectively you know a CEO to to run
that so that they could keep going and
creating the next Chipotle can you talk
about transitioning I think this is
actually the hardest part um of all this
is transitioning and like you have
always given me advice and whenever and
I believe your advice was right and I
followed it but at first your advice was
basically just bail uh and and and you
were like just talk to him like once a
month and then once a quarter and then
once a year um and I was like well I was
gonna like keep working there and
talking to him every single day and like
G feedback constantly and be in all
these meetings and you're like no so Sam
is the question like you've hired the
CEO what what are those first 100 days
supposed to look like yeah and then and
then after 6 and 12 months what's it
look like because it's this is the hard
part where emotion typically takes over
logic totally and it's terrifying to use
the baby analogy you know you imagine
you're you have this beloved baby and
then you watch the foster parent and
they're playing a little rough with your
kid and you don't quite like what
they're they're feeding them and well
they don't really know the nap time
routine right so it's a little bit scary
passing off your business baby to
somebody else um what I what I think you
do have to rip the Band-Aid and let them
jump in the pool I think it's incredibly
important that you ERT to your top
Executives this person is in charge and
uh you can't come to me anymore right so
what I what I like to do what I would do
in the early days is I would make the
announcement explain why I'm making the
announcement why I'm making the change
and then I would I would literally leave
slack I would stop responding to texts
from the executives I wouldn't respond
to email and I would say to the CEO look
you know you're in charge let's do a
check-in in a month and then I would
just completely check out and I'd say
you know look if you want if there's any
emergencies you can always call me and
get get an opinion but do you give them
like a guide like are you like compiling
everything in notion like I don't know
like like hamb well maybe maybe not
maybe not quite a guide or something but
you're doing a lot of brain dumps right
you're going to spend a couple days with
them and go through everything but uh
you know business is funny like
everything tastes like chicken like a
competent CEO will be able to jump into
most businesses within five 10 days be
able to kind of get the lay of the land
and get moving um so I don't I don't do
too much of that transition stuff um and
and then fir so first you're checking in
maybe every two weeks then you're
checking in every four weeks then you're
checking in every three months and then
if you want you can go to six months or
a year and I really think that the worst
thing you can do is have them writing
you a whole bunch of reports and
constantly text them and engaging them
and making them feel they don't have
power and then worse than that the swoop
and poop right like so you bypass them
you text your old VP of marketing you
say I noticed you guys stopped AB
testing this on the homepage what's
going on with this and then before you
know what your CEO feels you're
undermining them and all the executives
go well I see who's still pulling the
strings you know Sam's still in charge
I'm just going to go back to Sam and
then the water the stress Finds Its way
back to you so um I'm a big fan of just
being I mean you got to do your
diligence if you're going to give this
person your business baby you got to
know they're not a a epic piece of [Β __Β ]
right that's very important but if
you've done all that we can talk about
all the diligence stuff so you got to
get comfortable that passing your
business to this person is going to be
okay well how many months or quarters of
mistakes or misses do you let them have
well it depends I mean you know is it a
hard business or an easy business how
Stark is it you know was it the moment
they started within a month the
performance went to [Β __Β ] is there a good
reason for that I think it's a really
hard question I mean we've had very very
competent CEOs join hard businesses and
the business gets worse under their
purview doesn't necessarily mean they're
doing a bad job it could be a macro
problem or there could be some other
headwind so I think that's up to you to
assess I always say um you know you want
Flesh Wounds not mortal wounds so would
I allow a CEO to spend 500,000 on some
R&D boond doggle yeah maybe I don't want
them to feel that I'm holding them back
but would I allow them to announce to
all the employees that they're changing
the business model and shutting down
some critical Revenue line uh maybe not
you know I'd probably watch something
like that and ultimately I think it's
important that you say I'll never forget
when I was reading 4our Work Week Tim
Ferris had this whole thing about
anything less than $55,000 doeses not
require my opinion and I think it's
important you set that control with the
CEO so you say anything that that you
want to spend more than $300,000 on I
want you to come to me I want you to
discuss right so you can kind of build a
bit of a bounding box around that we got
to take a drink every time you say a
cute Canadian phrase uh we've got
boondoggle we have Dingus we've got
creepy
Crawley what else you got for us Dingus
Dingus isn't even Canadian it's actually
it's from Tim Tim and Eric do you guys
ever watch Tim and Eric yeah I want I
want more of that go ahead Sean let's do
um let's finish up actually in the
hiring and diligen in stuff so I I have
I have one more on the interview so do
you meet in person or are you trying to
do everything in Zoom do you like spend
spend time you know any extended time
with them yeah I like to meet them in
person yeah um I think there's something
to looking someone in the eye seeing how
they their body language is you just
can't get that same level of diligence I
have hired people sine many times but
for major hires I always want to meet
them in person so in terms of diligence
it this is the most critical thing and
this is where we've made the most
mistakes right you can avoid endless
pain if you just diligence people
carefully um and this is you know anyone
who's hired people at a company knows
this you know check references top
grading there's all these different ways
of doing it um but there's a couple um
you know there's this idea of like trust
but verify right so I'll trust my gut
that's my first screen um and then I'll
perhaps introduce them to like one or
two other people I trust so like Chris
might talk to the CEO as well someone
else from our team we'll assess okay do
we get any creepy crawly Vibes if that's
not the case if we don't then we'll move
into actual diligence and we've learned
the hard way we've made a couple really
bad hires um that burned us and so we
actually use these former CIA guys to do
background checks they're called
business intelligence advisers kind of
like CIA but with a b and they are
incredible they will interview they'll
so they'll call up the person they'll
talk to them for an hour or so and
they'll write down every single thing
they say so if they say oh in college I
was a athlete they'll they'll verify
that if they say um oh I left that
company because XYZ well they'll go and
uh look up that company and they'll
message five people who might have
worked with them and so you end up
getting this dossier on the person that
gives you a high level thing of what are
the what are the positives what are the
negatives um and then also have they
ever been um you know accused of a crime
have they ever had like a track record
of like not paying bills uh legal
records all that kind of stuff so I
think that's really important and we um
we've made a really bad hire um about 10
years ago and the guy basically was like
full of [Β __Β ] about a whole bunch of
stuff on his resume and it ended up
being a nightmare and so after going
through that experience I think it's
well worth paying between 10 and $20,000
to get this deep reference check done um
and so that I think that's just so
critical that's that's amazing do you uh
sounds like between the recruiter and
the reference check the the background
check people
you might be spending anywhere between
50 and $100,000 of transaction costs in
recruiting a CEO I'm assuming you can't
do that when it's a $300,000 a year
profit business what is the minimum bar
you use when you're gonna when you're
going to pay for both the the the good
recruiter and the the background checks
and what would you do for the if you're
the person who is more at the 300,000 a
year profit um and maybe can't afford
those transaction costs how would you do
it DIY well I would just follow the same
process right so you know you're not
going to be able to hire the recruiter
and afford them and so you're going to
try and cast your net really broad
you're going to talk to a lot of
different people when it comes to
verifying what the person tells you the
number one thing is never call the
references they give you right any snaky
person can find three buddies who can
you know say that they're great or
whatever it is I always try and Scuttle
butt so I'll say Okay um my friend
invest in that company and I'll ask them
to ask the CEO why that person left or
if they recommend I also have this trick
I don't remember where I got it but I
love this one you email a whole bunch of
people who used to work with them or the
former CEO they worked for and you
say hey I'm doing a reference check on
this person
um I'd love to talk to you about them if
you don't respond to this email I'll
take it as you didn't have a good
experience oh Eyes Cold
such a great it's such a great trick
it's such a great trick because if they
don't respond people will almost always
respond because they don't want to [Β __Β ]
on somebody if they um if you know if
they have anything good to say but if
they have something bad to say it gives
them an out because a lot of people I
found are worried about legal liability
they don't want to go and like you know
say this person's a piece of [Β __Β ] and
then that person sues them or something
like that dude I'm going to use that
line for any email I want uh I'll just
like ask someone anything like if you
don't if you don't reply I'll assume you
hate yourself and your
family yeah exactly sales guys do that
all the time it's the worst um okay so
you found the person how do you
negotiate and structure the comp package
for the CEO so um I always like to make
the first offer um because ultimately
you kind of know what you're willing to
pay and what makes sense based on who
they are and I think you kind of have to
scale up or down based on their
experience so there's times where I've
taken a risk where I've said you know
what this person was um they're a VP
marketing but they really have CEO
energy and I'm going to take a chance on
them I'm going to try and um you know
pay less for someone like that I'm not
necessarily going to put them into like
full CEO comp I'm going to try and go
high variable low base um but someone
who's more established you know I'm
going to give them basically what they
what they want and uh and whatever we
think the range is there um and then the
most important thing is to use total
compensation
so when you make the offer so let's say
let's say I have a business that's doing
$300,000 of profit and I can comfortably
afford a CEO base salary of 150 Grand
right so let's say this person is worth
300 Grand a year 400 Grand a year I'm
going to go to them and I'm going to say
I'm going to pay you 300 Grand a year
but it's going to be $150,000 base and
it's going to be $150,000 bonus and the
bonus is if you get me to $600,000 of
eitaa right and so you're basically
using the profits that they've created
to pay them the bonus and you've created
alignment between the two of you but
it's important never to just say well
I'm going to offer you $150,000 a year
plus a bonus because in their head
they're going like no I'm a $300,000 a
year person right so I always lead with
What's the total compensation and then
what needs to be true to achieve that
compensation I'm also a big fan of cap
bonuses so for example let's say the
target is you know $600,000 of eitaa
well if they do $1.2 million of EA I
want them to get double the bonus maybe
even triple the bonus um and that's
worked really well for us so the idea of
saying look I'm gonna offer you $300,000
a year but it might be$ 600,000 it might
be a million dollars a year depending on
how you
perform um and then the other thing is
equity is just hard um I'm not a big fan
of stock options I like to try and find
people who are willing to if they want
Equity they're willing to write a check
so if a CEO comes to me and they say
okay but I need you know I need Equity I
need skin in the game I'm gonna say
something like okay so you want um
$40,000 of equity per year uh are you
willing to lower your compensation by
$40,000 or are you willing to write a
check you know do you have do you have a
stock portfolio you can sell and you can
inject the money into the business and
I'll let you buy in at a really great
valuation and if they don't want to do
that then sometimes I'll even loan the
money I'll say I will personally loan
you the money and then you're going to
write a check and you're going to buy it
and I have the right to buy back your if
you leave I have the right to buy back
your stock at whatever multiple of the
earnings at the time or whatever it is
how how how do people react to that
conversation because that's very
different than where a lot of people are
probably coming from well I want them to
Value the equity and they don't value
the equity when they get stock options
they just look at it they don't even
consider it as part of total comp so
let's say that like all here's here's
the kind of thing I'd hear so they say
um I want to make 400 Grand a year and
and I want equity and I'd say well okay
how is the equity going to work they go
well I think I should have 5% and let's
say the business is worth $100 million
so they've now said Okay I want $5
million and you're like okay well you're
you're worth four to five 00k a year
based on your track record and your
experience and all that kind of stuff
how am I supposed to give you $5 million
of equity that just doesn't make sense
and so I always try and talk about it in
terms of what's the cash value of the
equity that they're receiving and how do
we create a scenario where we have
shared downside and a lot of people in
Silicon Valley are used to stock options
and the way stock options work is let's
say sam you joined my company and the
stock price is $100
and I say here's $100,000 of stock
options at $100 share price if the Shar
is drop to
$50 it's a lotto ticket and it's a zero
it's not worth anything if it goes up
then it's worth a shitload and so you
end up with this kind of binary
situation where they have this lotto
ticket that pays out big or as a zero
and so what that means is if your value
of your business goes down even 10% %
they're basically at a zero and so
they're disincentivized so I just I
don't love stock options and in general
I only like giving Equity to people who
are willing to sacrifice something for
it otherwise you know why why wouldn't I
just pay you a really fat bonus if you
get down to it that's usually what
Executives want they want to do an
addition to their house they want to go
on crazy vacations they like cash most
of the time quick kind of question as we
round up to what the downside of all
this is is like everything you're saying
I think sounds when I hear it I'm like
this is the
way is a fair argument against this that
founder-led companies typically have
more Innovation or more soul and things
like that and that it's better to have
one thing go big versus many things that
are potentially okay is that a fair
argument do you think or
no yeah but I think like I said in the
beginning I think it comes down to
personality like I think if you're so
for me when I was running
metalab I started five other companies
in the first three years because it was
irresistible to me right now I knew the
right thing to do might have been to
focus on the business but my personality
is that I want to go do other stuff so
Sam like you seem super focused right
and maybe you're better off just having
one Focus you wake up every day you you
think about one thing but if you start
finding yourself getting drawn into
other businesses it would be a huge
service to continue to run that business
right so I think ultimately it comes
down to being true to yourself you
shouldn't if you're listening to this go
oh I should go do this you should only
go do this if you're drawn to it it's
the same advice I give to entrepreneurs
they say well should I go and work in a
company or should I be an entrepreneur
and I kind of go well if you have to ask
that question the answer is probably no
right because for me I could never
consider working for someone else I if I
whenever I had a job I just wanted to
shove the boss out of the way way and
take the wheel of the business so I
think to me it's just it'll be obvious
if this is something that appeals to you
you'll know you'll be listening to this
nodding along and going oh my God I can
I can do this I just didn't know I could
do it and not feel
guilty well dude this is awesome we love
having you come on um what do you think
Sean yeah this is great and it's also um
earned information so this is not
something that you you might be able to
read in a book but a lot of the Nuance
of what you described is from hard
lessons that were you know things that
went right many mistakes of things that
went wrong and the lessons you've
learned so we all got to benefit from
you know your 20 years of experience
kind of going through this process
yourself and um I know for me it was a
huge unlock to be able to hire a CEO and
do that successfully and I was like wow
this is cheat codes oh my God I get the
business is going to do well it's going
to do better than if I was doing it you
know I get all of the reward without any
of that work and it's a total great
trade for this person because I kind of
didn't really appreciate how many people
are entrepreneurial but maybe not
entrepreneurs they are people who are
great CEOs but they also got two kids
they don't want to take full-on risk so
they they want that kind of medium
upside um low downside and uh finding
that fit has been pretty huge for me so
I think that's great A lot of the things
that you said that stood out to me the
golden nuggets for me was find the find
the number two at a business that's two
2x bigger but similar to to the one
you're in right now figure out what's
their Hammer because that that's
probably it everybody's a man with a
hammer and and you just have to make
sure that that's the right hammer for
your your business um and then pay up on
the on the reference checks and the
recruiter to make sure that you you get
enough candidates and then you find the
right person because that's a it's a
necessary tax you have to pay once the
business is big enough that you can
support this and then leave them alone
that's the other thing most people don't
leave them alone they say well it didn't
work you know in the first two weeks
they did something I didn't agree with
so I def fire them what's the balance
there like you leave them alone but you
don't leave them completely alone I
think for you guys they send you what a
f a finance only update every every
month and then is there anything else to
it like a strategy planning thing or do
you do anything else so what we used to
do is we do a report every single month
and they would write like here's what's
going on in the business here's the
numbers and that was just crazy we
couldn't keep up and it also wasted a
lot of their time now we get just the
numbers to head office and we meet the
CEOs annually and then often uh there's
certain CEOs we don't even meet because
they're within operating platforms so we
just meet with the CEO of that operating
platform uh usually like monthly or
quarterly and check in um by the way
this is the number one thing I get
emails on like literally like every
single day I get questions about it on
Twitter and on email and so I actually
wrote a PDF on here like a checklist
basically on are you ready to hire a CEO
and how to hire a CEO and if you sign up
for my newsletter it's never enough.com
newsletter uh I'm gonna post the PDF uh
next week I think awesome okay great I
think that's that's the that's the Pod
everybody should go check it out
never.com what newsletter newsletter
yeah and we'll link to it in yeah we'll
link to it down here um all right dude
thank you that's the pod
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