Chapter 1: What does Ryan Deiss mean by 'The More Valuable You Are, the Less Valuable the Company Is'?
So I've been running businesses for 15 years and I've hit this wall multiple times. It's somewhere around 7, 8, 9, 10 million in revenue where suddenly your biggest problem, it's not a lack of ideas, it's a issue with you. You're the bottleneck. And so I've got this buddy named Ryan Dice. He's got this amazing quote. He says, the more valuable you are, the less valuable the company is.
And I read that quote in one of his books a while ago, and it kind of changed my game on how I thought about business. And so I decided to have Ryan come on and talk about the simple but very effective framework he has for running companies. It's changed my life, and maybe it could change yours. But on this podcast, he shared everything.
So he shared his whiteboard, his spreadsheets, his flowcharts with his employees. It's basically like a 30-minute MBA, which is pretty insane and very valuable. So check it out. Let me know what you think in the comments. All right, let's get into it. You have two things that I like. One is you have this quote, which is the more valuable you are at your company, the less valuable your company.
I think this is like for every entrepreneur, you will hit this point, especially when you want to sell. where it felt really good to be the man, to be the one creating all the value, to taking all the shots and having your name everywhere and your face everywhere and your fingerprints all over the business. It does feel good from an ego perspective.
It does feel good to have control, but it sucks if you ever want to go on vacation or sell your business because the more valuable you are to the business, the less valuable the business is. Yeah, you got to decide. Do you want to be down on the court hitting the last minute jump shot to win the game? Or do you want to be up in the owner's box? That is the choice that you make.
And so you're either going to be the most valuable player or you're going to own the team. Most entrepreneurs would much rather be valuable and they would rather do the things that enabled them to get started than do the things that are going to enable them to actually achieve the things that they say they want but really, they kind of like being important. They kind of like being valuable.
And I think that's, you've got to decide what do you actually want. And the nice thing is, it's your business, so you get to decide. Yeah, but a lot of times the problem is impulse control. Like, so like... He says, as he cuts you off.
uh it's it's impulse control i think like i can say that i want something and i do truly want it but 20 years of previous behaviors have to be broken and it's incredibly challenging to actually do that and i think that like evolving as a person is we actually just did an episode on the other day it's way more challenging than um than a lot of people think
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Chapter 2: What are the first steps to creating a business that runs without you?
I like this graphic you had here of the before and after. You know, I think the messy sort of entrepreneur, which is, you know, I've been guilty a lot of these things. You're working 80 hours a week. You're in the weeds. If you ask who owns this, the answer is me, me, me for each area. The whole team is asking you, hey, you got a minute to talk about X, you know, 200 times a day.
You're missing soccer games. You can't sell the business because it's too dependent on you and the business owns you rather than you owning the business. And then you have sort of the ideal sort of I'll come here at the end, which is, you know, it's an hour a week for you. Team executes without you. The team optimizes without you. The team decides without you. You can take a 30-day vacation.
You break revenue records while you're gone and you're exit ready if you want to, right? Like as an ideal end state. And this is for an entrepreneur who wants to exit, you know, wants to build what... is sort of insultingly called a lifestyle business, but is, I think, the main type of business I'm interested in. I use business to have a good lifestyle. So yes, that's kind of what I want.
So what's the process? How do you do that transformation? How do you go from player to the owner's box, Ryan? The way that you begin to implement it is you have to establish defaults. You have to establish certain default constraints. I'm going to leave at 5.30 every day.
Like, I'm just, I'm going to do that, and I'm not going to show up until nine, and what do you know, magically, I got my work done in that block of time, because I did. And so just the prioritization of that is going to do it. So I mean, I think that's the first thing. That is then going to force you to at least stack rank your priorities, because you can't do everything.
Because yeah, you're right, we got a million different ideas, but what are the ones that we're going to do first? I like to say, like, our ideas are like chocolate cake, not cotton candy. You can only eat so much chocolate cake. It's delicious, but you can only eat so much of it. So what are those things that you're going to do to begin to stack rank those?
And it does come down to, again, just getting really good at constraint identification. We can do everything. There's all this stuff that we could potentially do. As entrepreneurs, we are trained and adept at identifying problems. We see them everywhere. We will never not see them. But we certainly can't fix them all at once. So what's the one we're going to do next?
And that's the only question I'm ever asking. What is my right next thing? What is the thing that I'm going to do next? And every problem in business is going to come down to one of two things. Is it a supply constraint or a demand constraint? Demand constraints, I just need more leads and sales. Supply constraint, please don't give me more leads and sales. I can't fulfill the ones that I got.
And so once I've identified that category, now I just need to say, okay, how do we get this done? So if it's not going to be me that does it, Who do I need to bring in to do it? And ultimately what it's going to look like is bringing somebody in who is better than me at one aspect of this.
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Chapter 3: How can establishing defaults improve business efficiency?
Because when you hire helpers, what you actually did is you gave yourself a new job called management. which is even harder. Or let me hire somebody just like me, because somebody just like you doesn't want to work for you. What you need to typically do is realize that that constraint is solved by a functional leader.
And so what you need to get good at is hiring very, very, very good and talented functional leaders. So head of sales, head of marketing, head of product. And this is the thing that most entrepreneurs aren't as good at as they're scaling. They're good at hiring a bunch of little helpers, They think they're good at hiring a quote-unquote COO, although nobody actually knows what that is.
If you can get really good at hiring a functional leader and building a team of those, now team leadership becomes a lot easier when you have three or four actually talented, skilled people working for you. They have massive capacity because they'll build the teams under them to execute all your ideas.
And so if you want to read the whole book instead of just reading part of it, visit HubSpot.com. Sean, two years ago, you were like, I just hired this, I think you said, I just hired this VP of marketing or CM, I forget exactly, it was a marketing position, I forget the title. And you're like, what was it? CMO. Was it a CMO? And you were like, why didn't I do this sooner?
And I remember thinking, oh man, you found a winner. Like that's like the highest leverage thing that we can do is just like find winners and it's so challenging. But I remember you like talked about finding this person and your like frame was broken.
Yeah, there's a new test for is this person a good hire or not, which is you basically, you switch from, I wish this would happen, or I hope this would happen, or I want this to happen, to basically fear that, will this person leave?
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Chapter 4: What are the common mistakes entrepreneurs make when systemizing their business?
Because, oh my God, this person is so good. And they are like, they're so transformative to the business. And I just don't have to worry about that. And that if they ever left, I would have to worry about that area of the business again. I think we had John Morgan on last week, and he has this phrase called send and delete people.
He's like, there's people at your company that you could just send them the email, you could forward them the email, and then you could delete the email because you know it's going to get handled. And, you know, Brian, this thing you just said is so true. I actually was talking about this last week about helpers. I was like talking to somebody on my team. I was like, are you going to be a helper?
Like so far, this has worked because I needed you as my helper.
Chapter 5: How do you effectively identify constraints in your business?
But now I'm asking you to drive. but you still are acting like a helper. And like, but you want to be a driver and we need a driver. So like, it's time to be a driver. Now, whether that person can make that adjustment or not, I think is always just about that person and their own kind of goals and self-improvement and self-development, their self-image.
But it's so true that it's very, very tempting to hire other people Just kind of entrepreneurial people like me. Great, now I got another sort of like shiny object syndrome idea guy in the room. That doesn't help. Or I got a helper who, as long as I'm directing everything, they help me get stuff done.
But that means I always have to keep my eye on that area because I'm the one coming up with the plan. I'm the one driving the execution and they're just there to help. So I've definitely felt this problem firsthand. The biggest mistake that people make when they map their business process maps is they will map what they wish were true instead of mapping what actually is.
And so you have to map what actually is happening today, not like, well, what we should be doing is this. Like, that's generally unhelpful. You need to see all of those as points of future optimization because we've got to get a picture of what it is today because that's what's going to inform what are all of the people actually doing or what should they be doing.
What are the metrics that we do need to track? The other kind of thing that you want to make sure that you're doing is that you are starting from the audit of those value engines. So you don't want to just say, I'm going to build out my scorecard because that looks cool. Okay, but what are the metrics that you're picking?
Because if the metrics that you're tracking, if they don't all link back to a step or stage on one of those business process maps, then you could very well be tracking something that doesn't matter. I'll give you an example. When we rolled out our scorecards to our team,
We had somebody at our company who was like, hey, we don't currently have any metrics for, this was at Digital Marketer, one of our companies. We don't currently have any metrics for our email newsletter. Why don't we have that? I was like, well, where, show me where the newsletter feeds into anything. Like, oh, well, you know, it's good for awareness and engagement of the list.
I'm like, okay, but how does it drive into anything? And the answer was it didn't. Because the newsletter didn't show up as a sticky note on any of our growth engine, because at no point in the newsletter did we ever link off to anything that was meaningful. It never showed up. It never wound up as a sticky note on anything.
Like, that's why it never showed up on one of our, you know, growth engines, which is why it never showed up on the scorecard. We're not tracking the metrics. So I had to say to the person, like, look, if you can show us where this actually has an impact on one of our... you know, on our growth engine, then you'll get some metrics to track. And until then, you won't.
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Chapter 6: What is business process mapping and why is it important?
It'll be a much smaller percentage of that with a baseline. But if this business winds up going public in a couple of years, let's just say that's a couple of EOSs for me. Dude, this is why you're fascinating to me. I think Sean uses this phrase, generative. I use the phrase prolific. You've been doing stuff for 30 or 20 years now. Yeah.
No, and look, a lot of it's just being old, having been around for 20 plus years and being in the game for a long time. And that's why I tell people like so much of this is patience and just allowing, just getting in the stuff and doing it. I mean, again, the first thing that I sold online was an ebook on how to make your own baby food for $14.
So your first thing does not have to be, I went out there, I had an idea, I flew out to San Francisco, I was in the YC batch, and next thing you know, I'm a billionaire. That's not how it has to be. It's not how it is for most people. It can start pretty humbly. When did you first feel rich? I still don't feel very rich. Why not? Part of it's because we still live relatively below our means.
I've got four kids and I never wanted to live in kind of a place where You know, they weren't around, I guess, normal kids, if that makes sense. I've seen some of my other friends who they moved, when they hit it big, they moved to like very ritzy areas and there were no kids there for their kids to play with. And so my wife and I talked about that.
Like we just sort of stayed in the same place that we were in the whole time. And so I haven't really expanded my lifestyle that much. Are you still chasing money? Yeah. I think the main reason, though, is I still live in the perpetual fear that it's all going to go away. I appreciate the honesty. I feel like most people aren't honest with themselves or others about that.
You know, the same just as, are you chasing money? I think most people would... you know, reflexively deny that. No, I just love what I do, blah, blah, blah. And then it's like, but everything you do is about making money. And if there was no money, you wouldn't do it. You know what I mean? And so I appreciate the honesty. I am completely coin-operated. I'm in this for the money.
I wish, you know, and I acknowledge the brokenness of it too, by the way. Like, I wish... I don't know that there is, like, some number. And it's also one of those things, like, I don't even know how much I have. I don't look at it because it's not about, like, stacking those kind of things. And it's the same even with the businesses.
Like, I can tell you more about the businesses we have that are broken than I can the ones that are working well. You know? Like, for whatever reason, my focus is always on the things that aren't quite right than on the things that are. You're interesting to me because you come off like a fairly conservative person, meaning like super well-operated.
And yet there's this other side of you that comes off like a gunslinger. Like, screw it. Put it all in red. Let's do it. You look like a guy who I'll see at church every weekend, but also has a bookie who calls him. And it's like, whoa. Okay, great. I like it. Very close to home, Sean. Thank you. All right. That's it. That's a pod. I feel like I can rule the world. I know I can be what I want to.
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