This transformation is hard and most entrepreneurs don't make it...
You need to change who you are at a fundamental level.
You need to evolve from a "promoter" to an "operator".
History shows us that promoters never last, they thrive in new markets but quickly get taken out by disciplined operators.
If you want to win in business over the long term -- you must become an operator -- this video shows you how.
1. Why "promoters" succeed in new markets but quickly get beaten by "operators" and why this pattern will continue to repeat forever.
2. Why the book "Made In America" by Sam Walton is mandatory reading for all executives at Amazon and one of my top 5 books.
3. Why you need to learn EVERYTHING about business to be an operator: Accounting, management, culture, operations, etc.
4. How I can sense the pulse and health of my entire business with one glance at a few key metrics.
5. Why builders aren't managers and why most businesses desperately need a general manager to be across everything so that you're free to execute.
6. How to hire a rockstar team and create a winning culture.
This video is a small cut from our Quantum Mastermind live event held early June in NYC. Quantum Mastermind is my highest level training program for sharp-minded, hungry entrepreneurs who are aiming to make 8-9 figures.
If you're not satisfied with success alone and demand the standard of being #1, this mastermind is for you!
We hold 3-day live events every year, weekly Q&A calls and have a private Facebook group. It's created more 7 and 8 figure earners than anything else online.
To learn more about Quantum Mastermind please contact [email protected].
Sam Ovens & the team at Consulting.com.
Sam: Was it good?
Male: Amazing. That's why I have this.
Sam: Honestly, that's one of the best books I've ever read. If you haven't read that book, you're a really irresponsible businessman. [crosstalk 00:00:24] Jeff Bezos makes it mandatory reading for every executive at Amazon. [00:00:30] It is forced, they must read it.
Male: This one right here.
Sam: Made in America by Sam Walton. [crosstalk 00:00:39]. There's a lot but I'm going to talk one main thing right now and that is that, he talks about ... [crosstalk 00:00:48]
Male: Sam spilled his coffee.
Sam: What's that?
Male: His going to need a coffee that [inaudible 00:00:57].
Sam: Yeah. You [00:01:00] don't want to know what it did to that book.
Male: I was hoping it was water damage. It does seem a [crosstalk 00:01:12].
Sam: Yeah. In that book, he talks about how the market that he was in, which was basically, convenience stores, by just stores [00:01:30] that sell things that people need and all the evolution's it went through. He talks about how the only people that ... He said, he saw so many people come and go over time.
Some people would be winning and then they'd be bankrupt and everyone comes and goes over time but the only people who survived, where what he called, slick operators. What he talks about is that, at the start of any new market, the main people in it are promoters. [00:02:00] When at first, when any entrepreneur starts in business, they're a crappy promoter.
They're kind of pulling rabbits out of the hat, to just promote and get customers, drum up a demand, get attention. That's how you start but then you have to evolve into an operator and an operator is someone who has good management, good operations, good support. They've got good financials, good accounting systems.
They're efficient and they're looking at how they can make every [00:02:30] process better, faster, stronger, cheaper, more reliable and they're constantly getting better. This is happening in the internet marketing industry right now. It was full of promoters but they're all dying right now. A lot of them are already dead because you just can't do that anymore.
The market's moved and now you need righter operations and you also can not get to eight figures, without being an operator. You can't be someone who just does good promos and is charismatic [00:03:00] and has a big social media following and all of that and make eight figures. Maybe you might do it for a little bit but then it won't happen anymore, especially as the market evolves. The slick operators will squeeze you out of everything.
It goes from being a promoter, to being a operator [00:03:30] and this is the thing that you have to do to get to eight figures. It's 100% required, mandatory. You can not get to eight figures as a promoter, you need to have dialed in operations. This is everything, your support, your books, your financials, your every system, every little nut and bolt in the entire business, [00:04:00] you have to know it. You have to know it inside out.
You have to have it machined, so it's going perfectly. You have to know how to troubleshoot it and you have to have other people watching it and you have to have the whole machine humming and balanced and tuned, to get there. For Sam Walton to achieve that, he was extreme, if you see the things he did on trying to make things efficient.
[00:04:30] He even bought an airplane, so he could fly over new developments and watch the traffic patterns and see where the main roads were and see how the town was growing and see where he was going to put his stores. Then he would go into other stores and see how they were laying them out. How they were positioning the products, how they were buying it, how they were pricing it. This dude was a fanatic.
Male: I heard a story, when he was in Mexico, he got arrested because the Mexican authorities ... [00:05:00] He was actually in a supermarket measuring some-
Sam: The distance between shelves, yeah.
Male: They thought there was a crazy man under there.
Sam: He would literally go there and measure things with a tape measure. He'd bring a voice recorder and interview all of the clerks and the people in there. He was a fanatic and he just wanted to ... If there was a little edge in anything, he did it. That meant that no-one could beat him, ever.
He would get the most [00:05:30] yield on his stores, out of anyone by a mile. People would think that, "Oh, you've just got some store in Arkansas, or whatever." How do you say that state?
Sam: Arkansas, so I said it right. Doesn't it end with an S?
Female: It does. [crosstalk 00:05:46]. Yes.
Sam: I don't get that man. [crosstalk 00:05:50]
Male: Arkansas but it's Arkansas.
Sam: I still don't understand how that happens. Did they just be like, "Well fuck that S, don't worry about it. Just put a W there." [crosstalk 00:06:02] [00:06:00] Then they would be like, "Oh, because he's running some store out in the wops," but he was making way more money than some of the stores in Manhattan and other things because he just had such good operations. His business was so dialed in and it goes way deeper than just promotions.
It would go into his fulfillment centers, [00:06:30] like where he would have stock his products. His culture that he would train people on. He also figured out how to turn minimum wage employees in low income areas, into people who were more efficient and productive, than educated in high income areas. He figured out how to squeeze efficiency everywhere and that's how he was able to win.
What's crazy is, when you read it, you'll realize [00:07:00] that this dude really did just start with one damn store and he would try and pull rabbits out of hats, to get more customers. He would put an ice-cream machine outside or he would have some sort of entertainment, like a clown juggling outside. He was a promoter like that and he would go and buy the products himself in his car and bring them back in his car and put them in the store.
He started off with one damn store in Arkansas and then he just grew it, brick by brick, store by store, until [00:07:30] it became the largest company on earth. He was the richest man in the world and Walmart was the biggest company in the world, at a point. Then Jeff Bezos learned from him and learned how to make that on the internet. That's what Amazon is, it's Walmart on the internet and he ended up taking over his mentor.
You can tell his entire business is based off what he read in Sam Walton's book. That's why he makes it mandatory reading for every executive.
Male: You guys [00:08:00] normally take about sales [inaudible 00:08:01].
Sam: Yeah but on company value and Walmart's freaking out, trying to figure out how to do online because they're not willing to give up their offline. They can't master online. They're going to win that race, Amazon, absolutely. If you want to get from there to there, you have to become an operator.
[00:08:30] You can't think, "I'm not good at management or I'm not good at the numbers or I'm not good at the financials or I'm not good at the details or I'm not good at this. I'm just good at just being charismatic on the internet." It's fine, you can think that but you won't get to eight figures. If you want to, you've got to change. You've got to evolve into a different beast.
Male: Can you give an example of a lesson that one could apply in a webinar business?
Sam: Sure. [00:09:00] In the beginning, Sam Walton only really knew how to promote and work hard, that was all he knew but then he had to learn accounting for his business. He would literally just come in. He'd carry his books, his financial statements to events and be like, "Can you please look at these and tell me what this means or how we could save on this?" He wanted to learn everything about his entire business and you have to do this.
[00:09:30] Andrew was a CPA before or he still is because I guess, you never aren't. He knows accounting well, its' one of the main reasons why he's been able to do it. You need to have that understanding, if you don't understand the accounting side of your business, you'll never really get to eight figures.
You need to understand that and most entrepreneurs just hand that off to their accountant and don't look at it, till they've got to file their tax returns. You've got to know [00:10:00] that thing well, so we'll put it up here. You've got accounting. I'm not saying you have to do your accounting but you need to know what the hell it means and you have have it ...
Have a bookkeeper reconcile your books at least once a week, it should really be daily. We have someone reconciling our things all day, everyday.
Male: Once a month.
Sam: [00:10:30] It's too late by then, if you've made a
mistake. You can't catch it.
Male: What are the key numbers you are looking at once a week?
Sam: Cash. That's the only thing I've had my eye on ever. I've actually set up my business to a point where, I don't even ... Because we only use debit cards and because we don't have credit and because we only use cash and if we make money, it goes into an account as cash and if we spend money, it goes out of an account as cash. I know what we're doing on cash, just by looking at that number.
If we're going up, it's going up, [00:11:00] if we're going down, it's going down. When you have credit cards and multiple accounts and all of this shit, it's all over here and it hasn't hit here yet. I don't like the idea of making a mistake there, so I don't use it. I engineered the whole business, so that I can just glance at different things and sense the whole ...
I can sense the health and the pulse of the entire machine, just with a couple of glances at different things.
Male: You're just looking at the bank account level at the end of the day and watching that [00:11:30] that number consistently rises. Sure, it might have any ... That it overall consistently rises, is that hitting then at a high level?
Sam: Well that is just checking that you're going to stay alive. That's just the start of it, that's my biggest concern because if we do run out of cash, we will seize to exist. That is the survival number and we can go backwards on it but not for too long. [00:12:00] Then after that, comes looking at your ads because that's where most of our expense is.
And what our ROI is on that, on cash and on revenue and I want to make sure it's at least 20% on cash. Then I want to look at my overheads and my payroll and all of those things and what those are and how those are impacting it. Then where we should be spending more money, where we should be spending less. [00:12:30] Constantly looking at it.
Every dollar should be going to work in the most efficient way possible.
Male: If your cost is two grand hypothetically, you're happy to spend hypothetically 20% ... 20% less, whatever the figure, 20% less than 1,600 bucks acquiring that customer. Is that [00:13:00] what you're saying, with that? Is that it, roundish figures?
Sam: It means that I'm willing to spend 1,000 and make 1,200 in cash minimum. If I'm spending a grand and making a grand in cash, I know I'm actually losing money because there's merchant fees, there's going to be some charge backs, there's overhead, there's all sorts.
If I'm making that, I'm losing but if the 20% margin there, it means that worse case, I'm probably [00:13:30] breaking even. I'm going to collect on the account's receivable but I try to do my math on the most dire numbers as possible because that way I know that I'm being very prudent.
Male: Your spend must be massive?
Sam: Yeah, it is.
Male: The cards that you use to pay for the expenses of the business, are [00:14:00] you part of any loyalty programs, so you get points and you end up getting all these first come suppliers?
Sam: No. [crosstalk 00:14:09]
Male: Does it get acquired millions-
Sam: We don't even use a card for ads. It's hooked straight up to our bank account.
Male: It's not even like-
Sam: No because they close damn cards. It's like fraud protection, ads go down for half a day. That there costs too much money. I can't afford for fraud protection to happen, so we miss that link.
We just connect our bank account straight [00:14:30] to Facebook. Then there's no card limit, then there's no issue of the card declining. It just doesn't break. Remove the links that can break.
Male: Sorry, say that one again.
Sam: I hooked my Facebook ads account directly to my bank account, not through a credit card or even a debit card.
Male: Is that an option for everybody?
Male: There is an option where [inaudible 00:14:55]. Once you do that, your account would be limited to $50 [00:15:00] per day and then you have to do the threshold again and again. If you're spending 1K a day, in credit cards and usage through your bank account, your ads will be like that high.
Sam: Yeah. Don't switch your main account.
Male: [crosstalk 00:15:11] start doing the thresholds again and again and again. You guys spend 50 and then you spend 50 by noon and then your account goes [inaudible 00:15:11] more than 50.
You've [inaudible 00:15:19], breaks this threshold, it's a mess but it is actually the best way because it makes sense. There is no more like, the [crosstalk 00:15:29].
Sam: Who's had [00:15:30] their Facebook ads stopped because their cards declined?
Sam: It used to happen to us twice a week. I was like, "This sucks," and then my team would have to call me because I was the only person that could call the bank. Then my phone was off or I was busy doing something. It's a potential issue that's going to happen, so you can remove it.
The way to get around it is, create a different Facebook ads account and link that one to the bank. Then start spending a bit in that and get its limit released and then you can use that one. Don't do it to your main one. [00:16:00] Yeah but it won't break, once you've done that, provided you've got money in your bank account, right?
Male: Just to clarify, you've linked your ... Instead of Facebook taking the money out of your credit card, it takes it straight out of the account?
Male: Did you have to go through an approval for that?
Sam: It might not work in Australia, I don't know. It might only be an American thing, you'd have to look.
Male: Was there a certain limit to how much you can spend with Facebook, before you can quality to get up to their 1,000 or $ [00:16:30] 2,000 per day?
Sam: No. I think it's just time. They want to see you use it for about a week and they want to see the payments keep working for a week, before they start letting you spend more.
Male: Its kind of like Facebook ... Google is a threshold and as long as your card's not declined in a certain threshold, they wouldn't question, either.
Sam: Yeah. Then our Google account's hooked directly to our bank too. Then a lot of things [00:17:00] are hooked directly with our cards because then there's no issue for error there. Then we look at our numbers all the time, every day, all day. I have a full-time bookkeeper looking at them all day every day.
Male: She's just reconciling everyday?
Sam: Yeah. He's just looking at everything everyday and giving me a cash report everyday. Telling me what's going on. I have to approve payroll [00:17:30] before every run and then different reports on different expenses. If any expense comes up and he doesn't know what it is, he'll query it with me, so we don't miss anything. If a cent moves, I'll see it.
Female: I hae one of the requests that an issue, I assume you have more than this framework and we keep asking random questions, so immediately [inaudible 00:17:55] not. If there is more than the framework, what if you went through the whole thing and we didn't ask [00:18:00] questions?
Female: I just want to be [inaudible 00:18:03]. Yeah.
Sam: Yeah. You've got accounting, then you've got management and what you'll probably found, like I found is that, you have to do a lot still, as an entrepreneur, even when you have staff. You can't become just a full-time manager because you have to build. I have to build the courses. I have to do the Q& [00:18:30] A course. I also have to write copy, I have to build the funnels, I have to do different things.
A lot of my time is spent building and builders aren't managers, so I can't be a good manager and if I try to, then I won't be a good builder. This is a common problem a lot of people fall into, as soon as they get some people on their team. You need to hire a manager, once you've got more than five people.
Actually, I was thinking about this this morning, the best person [00:19:00] on your team right now, should become your manager. You don't need to hire a manager. The person who already knows the most about your business, knows every detail, knows every in and out, they should become the manager.
Male: Oh, so knowing every detail?
Sam: Knowing everything. Jessie became my general manager because he was a customer of mine first and he had been a customer of mine for years. He knew the product and believed in it and bought it and was applying it and all of that. Then he had worked with me on Facebook ads, then he had done sales calls [00:19:30] and he had seen everything happen since day one.
At first I was like, "I need a manager, so I should hire a manager." Then I started looking at managers and realized how useless they were. People who are managers, they come in with a certain stuff. Remember the people we interviewed? It's like, "Holy shit, there is no way I'm letting that go near my business." Then I was like, "It's actually Jessie is a perfect fit because he knows it all."
Then he's learned how to do the management but the [00:20:00] most important thing is, knowing everything. Every in and out, every detail, every nuance and how the whole machine works. You can learn the actual management side of it but learning that thing there and liking it and caring about it and being passionate about it, that's the most important thing.
Male: What are the roles of the manager? What's the day to day look like [crosstlak 00:20:25]?
Sam: How would you describe that?
Male: I would say [00:20:30] it's like, it really depends on where you are with hiring because it's kind of like, you're either building a department maybe. Let's say you've got your sales reps but maybe you're hiring someone in support. If you're hiring for a support person, you need to say, "Okay, what are there KPIs going to be?" You think it's per day, what's the quality going to be?
You're designing what those KPIs should look like, for that position and that role. [00:21:00] Then you're hiring that, so then you have to figure, okay, what's the job description going to look like? What are their accountabilities and deliverables? When are they going to report to you on these sorts of ... On structural things but once you build that out once, then it's just more of a check in, to make sure that they're doing that repeatedly.
You've got to design it and build, whatever that management system is first. Then it's just checking in, to make sure that they're delivering on their KPIs, for whatever [00:21:30] the department or their role is.
Sam: I think we've got 50 people in our team and I'm pretty sure I only hired 4 of them. The manager often ends up building the whole teams. I was told, "Jessie, Jessie, I need you to build us a support team." He would start writing the job description and then trying to find people. Finding them, onboarding them, teaching them what to do.
Trying to develop the systems, to be efficient with it. Then once we've got enough support people, then he [00:22:00] has to hire a manager to manage the support people, make sure the manager's doing the job, then he can move. Then he's building a webinar live chat team. Hiring all of the people, managing them, then putting a manager in there, then managing the manager. Then once they've got it, move, next team. Done that again, next team, next team.
He builds the teams, gets the system and then puts the manager in charge of the team, make sure the manager's doing it. Then he manages the managers. Without that, I never would have [00:22:30] grown.
Male: I'll just give you an example for that. If I do that, there are certain things that happened, questions students have, whatever, that only I can answer because nobody on my team ... It's amazing, nobody on my team ... I don't think has ever actually sat down and watched my webinar.
Sam: The first thing, all of our team does, is go through our whole course and the webinar. They have to watch the entire course.
Male: [00:23:00] Right now, if I take them off of what they do and have them do that, it's going to be chaos.
Sam: This is why you can't ... You need to first of all, get a manager or you need to find the person who knows the most about your business and make them a manager, right? Then you need to start thinking about the business structure. [00:23:30] A really key role definitely has to be the structuring, which is kind of like management. You always think, what's the design of the business?
Who are the managers, what are the departments, what are the different functions? Who are the people in the time and what are their KPIs, what are they actually doing? What's success, what's failure, what's average? Then are all the eyes on everyone, making sure everyone's doing the right thing at all times. [00:24:00] There is way too much going on in my business for me to know about it.
I have to trust different people are watching different people, that are watching different people, that are watching different people.
Male: You don't have a huge control issue with that?
Sam: Well I can't control it. If I try to, I wouldn't built I am controlling it, by letting other people control it.
Male: What I'm saying is, the trust that they [00:24:30] won't fuck it up.
Sam: Well sometimes they do but then they learn and if they fuck it up and don't learn, then they get fired but everyone's going to make some mistakes. The main thing is that, after someone makes a mistake, they generally learn from it, so it's going to happen.
Male: If you have people that have constantly fucked something up over and over and over again but you don't fire them, just because you feel bad, that's like a bad thing, right?
Sam: [00:25:00] It depends though because I know this feeling. Sometimes you think it's your fault because there is just no management and no support structure there.
Male: [crosstalk 00:25:13] these operational gurus are teaching, it's like there's this new thing ... That's what it is.
There's these guys, they charge how much ever for these masterminds or these programs, that teaches you how to run your company, create SOPs [00:25:30] and they always preach that, "It's your fault. It's your fault. It's your fault. You're the leader, your team's fine. It's your fault, it's your fault." [crosstalk 00:25:36]
Sam: Most of the time, honestly, it is because the management's so bad, that the damn person doesn't have what's there, to help them. Most of the time, it is. I'd have to agree but if the management is good and the person has the good management and they continue to fuck up, it's their fault. Yeah.
Male: Then fire them.
Sam: Yes but you have to know it's their fault.
Male: [00:26:00] Right.
Male: Jessie, you work with Sam, when defining the KPIs for each role? [crosstalk 00:26:10]
Jessie: Sometimes but often times, not.
Sam: Actually, we don't define the KPIs, until we've let people do it because we have no idea, we'd just be guessing. When Jessie built the support team, he hired all the different people, put the manager in place and then he had to keep babysitting the manager.
Then he couldn't go and do [00:26:30] other things, so we had to get rid of the manager and bring another manager in and then as soon as we did that, the performance just went ... Then he could leave that manager to do his job. I never once knew what the KPIs were or had any design into it. Jessie and the manager did it.
Male: Sam, do talk to any of your customers, except through your calls?
Sam: [00:27:00] No. Maybe a Mastermind member, if it's a proper serious question but no, I do the live streams for that and then, I do the Q&A for Quantum and then the Q&A for Uplevel and that's the place to ask me. I might reply every now and then in the Facebook group but that's it.
It's impossible for me to be able to talk to everyone all the time. Surprisingly, no-one ever messages me ever. [00:27:30] I might get one message on Facebook a week and zero emails in a month, from anyone.
Male: I get [crosstalk 00:27:39]
Male: ... a couple of people?
Male: Have you guys been ina situation yet, where you've had to fire people?
Sam: Honestly, they've just known it anyway, so it was so not even hard because they sucked and they knew they sucked. When we told them, they were like, "Fine."
Male: [00:28:00] Is that just because they kept making mistakes?
Sam: No. They just weren't into it. It was just a way to make money. Anyone that's doing something just for the money, they're going to get fired.
Male: You can generally see through though, in the interview process for that. No? Is that-
Sam: Sometimes but also sometimes, in the beginning, you're more desperate, so you're kind of willing to hire anyone. Then later on, when you're not, then you can start flushing out that [00:28:30] but quite often, some of your first hires are out of desperation because you just need fucking somebody, you don't even care.
It is better than nothing but later on, you've got to make sure that their performance keeps going up. You have to lift the bar.
Male: Maybe you can do something like what [Zambus 00:28:45] does, where after two weeks after training, you pay them $2,000 to leave and then if they take it, it's a good thing. If they don't, then you know that they're there for good reasons.
Sam: Or you can do what GE does and just fire the bottom 10% every year.
Male: [00:29:00] Wow, that's savage.
Sam: Not really. I mean, if someone's absolutely low performing, that means that they're not ... Yeah?
Male: How important do you think it is, at least for your core team, to have them in an office, close to you?
Sam: It's not necessary in the beginning. I think once you get up to a ... if you were doing ... I think the right time to probably do that is, [00:29:30] 5, 600 grand a month, sort of thing or maybe even 300 grand a month but-
Male: If they're working from home, how do you know ... If there's an issue with their performance, how do you know if it's because they're not [crosstalk 00:29:48]?
Sam: What is the role? If it's customer support, it's better for us to just look at their numbers in Help Scout, then to actually see them. When you see someone and they're not there, you might be like, " [00:30:00] He's slacking off," which is totally irrational.
If you look at their numbers and you're like, "How many tickets have they done today? What is their happiness score? How are they averaging for the week and all of that?" It's better to just manage them like that. It's better.
Male: Who would say is important to have an office?
Sam: I wanted to get an office, purely because I wanted to do my platform, which was, I needed a product manager who could understand my vision [00:30:30] of that and then manage all of my engineers and front end designers and all of that, just complex. I didn't really want to have to have that conversation over the virtually and all of that.
I wanted that person to be there. I actually wanted an office, so that all the managers could be here and then I don't really mind where their team members are. We often have the managers here but their team is virtual. Make sense?
Male: Yeah. I got it. That's it.
Sam: [00:31:00] I quite like the idea, especially when we get a bit bigger is that, all the managers are in here, so I can have that tight relationship and I can just ping anywhere I want and get a feedback of what's going on in that part. Make a decision, make a decision but their team members, they don't need to be here. Depends on the role, like support, definitely doesn't.
Live chat and that, definitely doesn't. I don't think strategy sessions, they don't need to be because they need silence. Then engineers, [00:31:30] developers, they don't need to be. You don't want them to be, they're too expensive here. Then you want ... I wanted the media buyers to be here, marketing manager to be here, data scientist to be here, product manager. Yeah.
Male: It's like all the stuff I do myself.
Sam: The hard stuff, I wanted close to me but yeah. Honestly, if I didn't hire ... [00:32:00] It's so hard to hire somebody yourself, while doing everything else, that it was the most draining thing and the hardest thing I ever did, just to make one or two hires. As soon as I put a team in place, like Jessie and a management team, they just hired everyone.
Who hired my Facebook media buyer and the YouTube media buyer, was Fisher. I hired Fisher, then he hired his team. You don't really want to hire someone's team. You want to hire them and then let them [00:32:30] build their team.
Male: It's like, in our support is to get those first people, then we need to teach them because it takes so much time, to teach them at the beginning, all the different part and [crosstalk 00:32:47].
Sam: That's a good question. I think, the first thing you want to ... The best way to know when to hire, is when the pain is extreme. You said, it was support. We do that [00:33:00] 100 units of time thing, right? Where is it all going? Probably going into your customer support. The first person you should hire, which you did, was a customer support person. That's when you do it.
Then if you're maxed out on strategy sessions and customer support isn't really an issue, which is more common in high ticket, then it's a sales rep. Then what about when they get maxed out? It's another sales rep. What about when they would get maxed out? It's another sales rep. Now you need someone to manage those sales reps, then you get one of them.
[00:33:30] Now you need someone to do the ads better, to fill all of their calendars, well now it's a media buyer. Now you've got all of this other shit going on, so now it's a community manager. Now you've got too many people, so now it's a general manager to manage them, all right?
Male: Do you have a map [crosstalk 00:33:49].
Sam: You start with where the pain is. In your case, it was customer support but I know in most people's case with the strategy sessions, it's the phone. As soon as they've [00:34:00] got that nailed, then it's a few more sales reps. Then it comes to the ads part. Then once you get those two parts nailed, it comes into operations, like a community manager, that's very helpful.
You've got the calls running, you need the recordings running. You've got the Facebook groups running. You need someone there to kind of balance all of that and then make sure it runs like clockwork. You don't want to drop the ball anywhere. Then customer support becomes an issue and you want to make sure you make that good. [00:34:30] Good support makes you more money.
Male: What would you call those people, customer support reps?
Male: What's the role there?
Male: When you think you're hiring, what's the title?
Sam: What do we call them?
Jessie: Yeah. Just support rep.
Male: Support rep?
Male: Do you have a map of all the different think, people you should be hiring at basic?
Sam: It differs but on [00:35:00] what your issue is and what your model is, it's where the pain is, that's always where the person should be hired but once you get to your stage, where you've got as many people as you have, you need a manager.
You can't hire any more people, you are the manager right now but you can't manager because you need to build but you can't build because you need to manage. You're not building or managing.
Male: It's a very vicous-
Male: You're going to roast me for that all weekend. It's a vicious cycle because [00:35:30] you can't ...
Sam: Good management is so important. Without that, the whole thing will just go chaos. Everybody needs to be watched in detail. They need to be fact checked, they need to be ... If someone's eyes aren't someone all the time, they're going to play up.
Male: Where do you find these managers?
Sam: Well I told you, Jessie was a customer of mine and he knew the most about my business, [00:36:00] so he just became the manager, even though he had never really done management but then I just told him to learn it. Then he did over time and then, Fisher for marketing, I found him from another company.
Male: Did you start as a media buyer, Nick?
Nick: Sort of. I mean, both me and Sam were on Facebook, when we started because Sam had to teach on his style, which was pretty similar to mine already but there was nuances I [inaudible 00:36:31] time.
Sam: [00:36:30] I found Nick because he knew how to do Infusionsoft, copywriting, Facebook ads, YouTube ads and funnels and like JVs and social media. He knew everything. I was like, "Whoa, this guy's pretty much running the entire company," which he pretty much was, which is why it was extremely hard to get him because the whole other company was about to collapse, so I had to wean him off.
I didn't want to hurt that other company, you know what I mean? [00:37:00] I like people that know everything, they make good managers. Google call them t-shaped people, so they know a lot about quite a broad range of things but they can go deep on one specific thing. You don't want someone who only knows one piece but not all the other pieces, they've got to know a lot.
Thinking that I could find someone that knew ads, [00:37:30] Facebook, copywriting, JVs, all of it, I was like, "Man," and then I was talking to Nick by chance. Well actually what happened is, he messaged me, wanting to trade knowledge. He said he knew a lot about YouTube ads and he wanted to tell me what was working on YouTube, in exchange for me telling him what was working on Facebook.
I was like, "Oh yeah, cool." Then I worked out. I was like, "Wait a minute, he's actually going out of his way to do this." [00:38:00] I was like, "No-one does that. He's actually going out of his way to make the company better." Then I found out that he knew everything about everything and then on that call, I was actually, "Do you want a job?" Then that was that. You want to find those people that have broad knowledge.
It's like Jessie knows everything about my business. Fisher knows everything about marketing and how that works. Then for our specific people, we want them just to go deep on Facebook ads or YouTube ads [00:38:30] but the managers have to be good generalists and also kind of good at specialist. They're like t-shaped, yeah.
Male: With the greatest respect to people's privacy, do you incentivize those managers, beyond whatever you're paying?
Sam: It depends on what the department is. Media buying absolutely has to be incentivized because it's crucial. Strategy session people would have to be incentivized [00:39:00] but customer support and other functions, don't so much need to be incentivized but we haven't really got our incentivization things dialed in.
This year, I'm planning to roll in stock options and things like that, to make sure that everyone is an owner, instead of an employee.
Male: Do you incentivize on media buying, based on ad spend or ROI?
Sam: Profit on cash. [00:39:30] With incentives must be aligned on the thing that's important.
Male: Right. It seems like the vast majority of media buyers these days, do it on ad spend or flat fee.
Male: Yeah because they don't want [inaudible 00:39:48]. Yeah, it's a risk. It's much better to have people align the profit.
Sam: The incentives have to be aligned perfectly. Ours still aren't, we need to do a lot more there because [00:40:00] really, stock options are the best in my eyes because that's long-term thinking. I think Jeff Bezos said it best, in his first letters to shareholders. He said, "If we want to be the best and survive the long-term, we need a team of people, who think and act like owners. Therefore, they must
actually be an owner." The only way to someone truly think and act like one, is to make them one. Same with Sam Walton, I think he learned [00:40:30] that from him. That's what he did, he made everyone an owner.
Male: Someone recommended this one time. I don't remember who it was or if it's in a book or whatever. It's like, say you don't have the YouTube buyer. They say, run a contest where you give everybody 1,000 bucks ...
You give five people in the contest, you give them all $1,000 in ad spend and whoever does the best, creates the most [00:41:00] profit on the cash, gets the job.
Sam: You could do that. What we did is, we just went looking at media buyers who knew all the technical stuff, have got experience and they were winning hard battles. Tommy, he was media buying for ... What do they call it? CPA.
Male: Yeah. It's the CPA [crosstalk 00:41:23].
Sam: He was doing media buying to get leads for colleges and that's hyper competitive and it's [00:41:30] also ... If you can make that work, you're good. Really good at that and nuanced at that. Then Jordan, our Facebook guy, he was doing affiliate offers on Facebook. They knew the platform and everything but then we taught then everything we knew and it took them six months to get good.
You have to understand that, no-one's going to be real good, until six months to a year but you have to hire for potential and then make them good. You're never going to find someone who comes in good and if you do, you're going [00:42:00] to pay through the nose for it but they don't really exist anyway. We hire for potential, make them good.
Male: Generally your first couple of people ... In my case, once it gets a bit too much for me to do strategy sessions, the first couple of sales guys, I'm also intentionally looking to move them into a management role, as the business grows. You're looking for that management trait in those first couple of guys as well, is that right?
Sam: Yeah. Sales might act differently, [00:42:30] just because that function is like ... Sometimes sales people just want to keep hunting, they don't want to manages, you might want to bring a manager in but pretty much every other role, yeah, once someone gets good at it, they can become a manager.
Male: Yeah because I don't want to hire a sales manager, who actually hasn't done any selling.
Sam: Don't worry about the future, you need to start first. [crosstalk 00:42:53] Cool. We'll keep going on this after lunch.