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>> Owen: Hi, everyone. This is Owen McGab Enaohwo and welcome to Process Breakdown Podcast.
While I get successful entrepreneurs are coming here to reveal how they create systems and
processes for their business which enabled them to now literally run their business on
auto-pilot without a constant involvement. Today my guest is Dave Sherwin and heís the
founder of Escape the Matrix a holding companies that has several E-Commerce website that sells
wellness, products and supplements. Dave, welcome to the show.
>> Dave: Iím excited to be here. Thanks for inviting me, Owen.
>> Owen: This show is all about having entrepreneurs come here to talk about how they created systems
for their business. But if you create a system and then you donít have the right people
in your company to use those systems to deliver results to your customers then the systems
are essentially pointless. And during our pre-interview, you talked about how you literally
have a step-by-step process for finding and hiring the right people for your company and
thatís what we want to talk about during this interview. Before that, I want to know
more about what does your company do and what kind of pain did you saw for your customers?
>> Dave: Well, Iím an online marketer. Thatís kind of my main skill set. Iíve done this
for about 10 years. Iíve got really intrigued with the internet and online marketing in
about 2003. The supplements came later. Iím a health nut. I do triathlons. Iím very competitive,
Iíve been to the national championship, I try to get ranked in my age group. Iím really
into this. Okay, so Iím really into health and wellness.
And one of the reasons why I want to know automated business is so that I can enjoy
my real passions which is my family and my sports and my friends and I donít want my
entire life to be work which is what I see a lot entrepreneurs fall into. So it started
with online marketing and then overtime, one of the things I learned from some pretty good
marketers, ìDoes the auto-market stuff you really love and really are passionate about?î
But even then as I got into supplements, I realized the main need was weight loss. The
fact is most people canít go out and do a triathlon and the reason why is because theyíve
got a lot of pounds to lose. You know, 60% of Americans for example are overweight. And
so that led me to really research the wellness arena especially the weight loss arena which
is hyper competitive but as I was able to find niches with the weight loss arena and
set up sites for products and thatís really where weíd have the most success.
>> Owen: So basically, you set up this company where you have different niches where you
provide wellness products and supplements to different niches and you have several different
websites all on the need this holding company. Thatís the essence of what you said right?
>> Dave: Thatís right. We had about probably 80 websites now in play. Some of which do
very little, some of which do a lot, all of which were constantly working on and trying
to get the next thing to pop, plus as an entrepreneur as you know, Owen, you can never get fat and
happy. You canít think that, ìHey, we got a few things really going on here and as much
as we want to automate our businesses, we just have to be smart and monitor.î
You never want to let something gets a lot updated and then 6 months later it dies because
you werenít paying attention. So itís always at monitoring and all is looking because also
things can break, websites that were performing 2 years ago may not be performing today. And
so my main job, Owen, is to set these things in motion to get the systems happening but
then do not get lazy. I love what I do, I like work but I like to not have to work,
right? Itís nice when the systems are working so that the work you do is optional.
>> Owen: And so let me ask you quick question. How many employees do you have at your company
right now?
>> Dave: The technical question is actually zero because I donít hire employees. I only
hire contractors. But in actual fact, those contractors are full-time, several that only
works for me and I have a combination of some contractors I donít need full-time. So for
example right now, I have two full-time people in the Philippines, one full-time person in
India. Iíve got a staff of a team in India that has 54 employees. I have a one ìGo-Toî
guy who will give the right assignment to whoever on his staff needs to do it.
So that firm has been great and for me, I only have to work with guy but I get the accumulative
brain power of 50 and then Iíve got a contractor in Salt Lake City here locally that works
for me part time as needed but is an excellent PhD developer, very talented in all areas
of under the hood type of development and working on websites and he works for me probably
30 hours a month. And the answer is 3 full-time, 1 part-time and the staff that as needed.
>> Owen: And one of the things that I want to do is give you as a kind of context as
to how much revenue you were generating in your business and maybe you want to talk about
what it was last year and what you expect thatís going to be this year?
>> Dave: Yeah. And you had warned me youíre going to ask those questions. I actually looked
at my tax return last year. Our revenue was $967,000.
>> Owen: Awesome.
>> Dave: And frankly this year, itíd probably be lower. I am not to be negative but I think
we may only do $800,000 and honestly, thatís okay. Iím rebuilding a couple of things and
there are a few things that we kind of taking a step back. So this will probably a down
year but rebuilding with the hoops that we can scale bigger in 2014. So if my business
does anything over 300,000, Iím a happy camper. So Iím not going to complain.
>> Owen: And the reason I asked that question is in case the listeners are wondering because
I want you to know that weíre about to talk to the phone who is really running a real
business, generating a real revenue. Weíre not just wasting your time. This is real information
that you can use in your business. And so, I was trying to find out. When was the lowest
point in your business, describe how bad it got in your business so far?
>> Dave: Well, I tell you. I had a real low point a few years ago before I discovered
the wellness products, I was selling a serviceó we had a system 4 online marketers. I developed
some skill in online marketing, has having some success and I put together a tool that
online marketers could use and include an auto-responder and capture pages and we hit
on the network marketing niche. We found that network marketers were coming to the internet
and they didnít really know what to do and we built a system for them.
And we got that system up to about $20,000 a month in revenue and Iíll tell you what
happened though and it was really awful. So I was making a living from that, things were
going pretty good and one day we found out we got hacked. Well, it shouldnít be too
big of a deal. We had about 5 servers running this business but that hacker was a good hacker
if thereís such a thing and got into our business good and he start sending e-mails
up our servers so our data centers shut us down and we could not get that guy out of
our server. We changed our password and did all these things and long story short, I went
from $20,000 a month revenue stream to zero in 6 weeks and that was the low point of my
career.
>> Owen: You also mentioned that in your business will have a lot of moving parts from large
to small and so thereís always this issue of back in the day before you systematize
your business of overwhelmed and youíll be in the bottom in your business. Can you explain
more about that?
>> Dave: Well, the story I just told leads to a great example of that. So for example,
I knew enough to build up the revenue stream but not enough to secure my servers. I didnít
have that level of expertise. I had no one on my team that had that level of expertise.
I didnít even know who to go to. So the first thing I had to do is scramble. What do you
do when your server gets hacked? And it was a learning process and so, that is one of
the moving parts that because I was so focused on everything else, I had ignored. I didnít
know that security was an important part of an online business, a very hard lesson to
learn.
And so to your point, what I found is, issue number one, youíve got to know your business
and the only way I know how to do that Owen, is to find people that are bigger and better
and smarter than me and to network with them, thatís one thing. I love to find people that
are more successful than me and take them to lunch. I do that pretty much every month
and sometimes more often. Any time I can get around on someone whoís done something bigger
and better than me, I pick up these little tidbits and describing to them my process
and then theyíll say, ìDave. Have you considered this?î And they tell me something I havenít
considered and so, thatís one great tip, Owen that has really been great for me is
developing a network of people.
And let me tell you something, I donít care how successful a person is they like to be
taken to lunch. A small time guy, the people listening on your podcast right now that might
be thinking, ìWell, I donít have any skills. Iím not doing anything yet.î Think of people
that are successful and offer them lunch and youíll be surprised of the caliber of person
that can teach you and mentor you in your business for 20 bucks, for an inexpensive
lunch somewhere. So that has really helped me.
And then Iíve learned to break my business down into the major parts. So for example,
when we build the website, there are three major headings. Thereís graphic design, development
and marketing. And what weíve found is from those three major points, we have to have
the right people on board who are experts in development. Development is different than
graphic designs and graphic designs is different that development typically and marketing is
different again. And so what I found is when I break that in my tool down into those three
components and from them, theyíre sub-categorized everything into those categories and make
sure that somebody besides me is on top of each of those areas. So we start with that
type of organization from the three major elements of the site and then drill on down
there of who would be responsible for each area?
>> Owen: I see how you came to the point where youíve broken down your businesses on different
parts of the business. Itís kind of a like a conveyor belt with different parts to it
and you have things flowing through and everybody at a specific part is responsible for getting
things done. But then, it now come to the point where we have to talk about your hiring
process because that was something that really got me saying, ìI want to interview you specifically
on your hiring process.î So, could you walk me through kind of each of the stages on the
hiring process that you have?
>> Dave: First of all, I use an online service called oDesk. Some of your listeners are quite
familiar with oDesk and if not, they might have heard of E-Lance. I donít know that
thereís any advantage one over the other and so Iím not here to sell those services
to anybody but Iím just going to say Iím very happy with oDesk, thatís the service
that I use.
And so first of all, the thing I love about oDesk, Owen is they already have a fairly
significant screening process in place. The person has to take certain test for example,
a big on is English. A lot of people now all around the world speak English as a second
language but may not have the skills necessary to work with me and in the particular task.
So oDesk forces them to do or not force them but they offer various test. Thereís test
in SEO, Graphic Design, thereís test in how fast they can type and many of the different
skills they may require.
And not only that Owen, whatís really amazing, they track that userís hours spent on oDesk
for other contractors like myself and those contractors, I can look up what projects they
have done, what kind of rating the person gave them for the works that they did, how
much experience do they have, what skills do they list. So when you go to the service
like this then youíre starting with a huge head start because you are able to only look
at job applicants that have the basic skills that you already require and theyíre doing
well on the test.
>> Owen: Okay. And so, I guess you use primarily use sites like oDesk. And so, what makes you
that process and you know, you have a specific rule in your business now that even though
they are not employee, they come in as contractors. Theyíre going to be doing the work on an
ongoing basis.
>> Dave: Thatís right. The word employee, really they are as technically contractors
but yeah, theyíre going to work for me hopefully long term. Now hereís a couple high level
tips on that Iíve learned through blood, sweat and tears. I hope people realize how
valuable these tips can be as they go about this process.
Number one is that a lot of entrepreneurs donít think about and this is a little secret
magnet that is the key. Give the job description, the job posting a really great title. You
see, one of the things that contractor wants, they donít want to be a Graphic Designer
but theyíd love to be a Senior Graphic Designer. And that little difference between ìSenior
Graphic Designerî or you put something on there. For example when Iím hiring an Executive
Assistant, I put Executive Assistant, not Virtual Assistant.
>> Owen: Okay.
>> Dave: The word exactly that sounds better and to the person applying for the job, you
see what they want is good history. They want to build up their own resume and have some
experience, a good sounding job. So if they ever leave my employ, it sounds like they
done a really great job when they go to apply for the next one. And great title is critical.
>> Owen: I guess at that very stage of where youíre trying to find the right person to
handle the task is you have to think like a marketer, youíre trying to sell the position.
>> Dave: You are. Thatís right. Youíre looking for a person thatís responding well. Thatís
thinking, ìWell, thatís the type of job I want to have.î Yes.
>> Owen: Okay. And so when you have now applicants come in, what kind of tracking systems you
have to be able to choose the right people? I mean go to the next process which is the
interview process. So now we have to track in.
>> Dave: Well, before you get to that point, once youíve copied the great title, whatís
really important is that you do an excellent job of describing exactly what you want. You
not only want to list the skill youíre looking for. You want to give them examples. You want
to tell them, for example, Iím hiring a developer, I need a lot to know we use WordPress. Thatís
our platform. You must have experience in Word Press. For example, Iíll state, do not
apply if you have less than 3 years experience. Sometimes I might say 5 years of experience.
So just think through how many years of experience were you looking for? What do they have to
know?
Sometimes, I will state that itís Graphic Design, Iíll say, ìIf you apply, please
provide me three links to work youíre most proud of.î You see how that works? I want
to know what have they done and youíd be amazed how many people you weed out about
Iím asking them for examples of their work. A lot of people canít provide examples and
so they donít apply for the job because they canít answer that question. So if you really
think through who you are looking for and how much experience they have to have and
what skills they need, they have to weed themselves out. So youíre only looking at the best people.
>> Owen: And what I get from that is you really need to be clear on the job description is
what you expect from them and kind of experience that you need them to have. But then the inside
of the job description, youíre also putting things in there that theyíve got to critically
ask to have read the job description and have to deliver those things to you like youíre
asking them for example, now youíre saying youíre asking them to show you the best work
they have done. If theyíre someone who is not diligent enough to read the entire description,
they wonít see that. They will just jump over it and you just know itís on the sense
of your response and itís not what you ask for in it then think, ìThis is not the right
person.î
>> Dave: Thatís it. And youíve got to be prepared because Owen, once you post some
of these jobs you can have 50 applicants to go through within 24 hours. So youíve got
to be prepared and if you didnít do a good job on that description, the reading process
is going to be a lot harder than it needs to be. So other criteria that you can set
is how much youíre going to pay, how many hours a week you want them to work, what are
the things that they are looking for?
Now think about this one. On oDesk for example and Iím sure it is similar on E-Lance. It
will say for how long will this job last and some jobs, I only need someone to do something
for a week but for the most part, theyíre not interested in doing a job for a week.
Theyíre looking for a long term thing. Theyíre looking to feed their family and so, anytime
you can that you put a job that lasts 6 months and more, youíre going to get more applicants
and more qualified applicants plus one thing youíre going to get when you offer a long
term gain is that people often give you a lower price. If they feel like youíre legit
and youíre offering them something they can count on for a year, 2 years or 3 years, theyíll
often give you their best hourly rate.
>> Owen: And Iím curious just on the part of posting the job out there and trying to
weed themselves out, is that a discovery from your experience that you can share with us
based on how you created the job description and the information that you were able to
weed out the flop and get the right people, anything that comes to mind that you can share?
>> Dave: Well, I wish I had a better answer to that question because the fact is, even
when you nail it, even if you nail it every bit of it, you do a perfect job, people lie.
And there are people that are going to apply any way that never should have applied and
you just going to have to go through and delete some of them anyway but to give a better answer
to your question, what I do is I do keep track of all my job descriptions. I have a file
on my computer for hiring because itís easy to forget. Itís easy to just kind of get
lazy and go, ìI need a new Virtual Assistant.î
And youíre just jumping in and cuff and then you forget a little thing. For example, Iíll
give you an example. I recently hired somebody and I forgot to mention they must work US
hours 8:00 until 5:00 Mountain Time. Thatís pretty important. I forgot to mention it and
I end up hiring a guy who is in Pakistan who didnít get the memo and heís going to work
while Iím asleep, you see and it was my fault.
And we were able to resolve that luckily because he was actually willing to work US hours.
He kind of said, ìYou know, what, Iím kind of know I got to start working US hours anyway.
Iíll accommodate you. Iíll just start with you as my first contractor I work US hours
for.î But that was my bad. That was a pretty big mistake to not tell someone they wouldnít
be working their normal daylight hours.
>> Owen: So basically, if you see yourself hiring for the same kind of position over
and over again, craft kind of like a story or set of requirements that youíre always
going to be needing and keep it someway so that you can always use, refer to that simply
for hiring that same person over and over again, next time you need it, right? Thatís
what Iím getting from there.
>> Dave: Thatís right. And another little trick Iíve learned Owen is, although we as
entrepreneurs, weíre like ready fire aim mentality. Weíd like to get things done.
We like to shoot from the hip. We like to go with the flow. In this process, you donít
want to do that. Better to write it all out and then not post it yet, come back to it
tomorrow, come back to it and review everything and really think through that and ìHave I
forgotten everything? Is there a skill I forgotten? How does this read? Will they really understand
it?î Itís worth getting this part right. If you can nail that job description on what
youíre looking for right up front on everything you really want is not a plus you want to
rush. So you want to get it right.
>> Owen: Okay. So now weíre going to this point where the applicants are coming in.
So do you have an applicant tracking system to weed all down from all the applicants that
>> Dave: Well, thatís another part of using oDesk. So hereís what happens. Letís go
back to what I said a minute ago. See youíve got 50 applicants to weed through. Well, the
first thing that I can do is I can see how much their hourly rate is. So for example,
if Iím willing to pay $5 per hour for this particular position and Iíve got applicants
who are $17 and $15 and $12 and $11 per hour, I can immediately eliminate those.
Now you can actually establish not an exact range but you can say on oDesk whether youíre
looking for low wage, medium wage or high wage and thatís more fair to the contractors
that they know what theyíre trying to show up for. Youíve got to remember, Owen, for
some people that are new to this game. Iíve got a Virtual Assistant thatís been with
me for 5 years in India and I pay him $180 and heís got a college degree in Computer
Science. Heís phenomenal. Heís my right hand now. Over the last 5 years, heís learning
my business better than I have. If Iím on vacation and something breaks, he can fix
it. Okay. He has become my ìGo-Toî guy and heís wonderful.
And some people might think, ìWell, they have you cheap skate, a $180 a week?î Thatís
not that much. You know what, thatís equivalent to about $60,000 a year in Rupees. Itís a
job heís very happy to have. Heís been able to get married on that wage. Heís been able
to enjoy his life and travel and get new clothes for the first time. Hereís a guy who is born
in a hut with a dirt floor who is now got a decent working wage with me. And so, this
sounds sort of in consequence. Itís a win-win. You know, this is one thing Iím passionate
about. Iím passionate about hiring people from disadvantaged countries.
Iíve been to the Philippines. Iíve worked with people on the Philippines. Iíve been
to India, flown out there, Iíve worked with them. Iím seeing their conditions. Weíve
sat together, weíve broken bread together and for me, thatís part of the passion is
actually hiring contractors on some other countries, getting to know their culture and
their language and their customs and their holidays and their families and knowing that
I as a US businessman and able to take US dollars and create a great lifestyle for them
and yet itís a win for me too because I can do it at lower than US market rate and so
thereís some people donít agree with that but thatís part of my [22:34].
>> Owen: Youíre click into the choir right here. So I wouldnít even get into that because
I actually have a Virtual Assistance Firm, thatís a different story. But anyways, the
thing is, Iím trying into more details about the applicant tracking system that you have
now because when these applicants come in you said youíre screening based on maybe
the price that they are willing to take on job?
>> Dave: Yeah. So, there would be terms on some obvious ones. Another big one you might
want to look for is there are firms out there that are applying for the job and you have
to decide, ìDo I want a firm for this one or am I looking for a Go-To person that just
reports directly to me?î Because thereís a big difference there and so you might weed
out according to that.
And the other one is right away, Owen, just reading the description of themselves, the
person canít even write a good description of themselves and they do a poor job representing
themselves and I can learn a lot about their English skills just sort of how they reach
out to me and how will they communicate with me. So Iím able to weed out some and so now
Iíve got my list to 50. Iím able to quickly go some that are out of my range in terms
of price. Can they not communicate very well? Do they not have the skills that I listed?
And in oDesk, you can click a little button that puts them on your short list. So step
number one is to short list. Typically Iíll end up with 10% to 20% of the entire list
on my short list. From the short list, my next process is to carefully review each of
those before I contact them and look at their sample work, their history, the exact projects
they have done for other entrepreneurs and whether it is fixing what I do and Iím able
to eliminate another faction of them again. And now, Iíve got a short shortlist and now
I contact those people and this is critical, Owen. This is how I weed it out again without
wasting any time contacting anybody.
I send the people on my short shortlist a simple e-mail saying, contact this on e-mail,
you contact them through oDesk. But I send the contact saying, ìMy Skype ID isÖ reach
out to me during US business hours and Iíd like to discuss this job with you.î And now,
a lot of them will weed themselves up because they wouldnít even find you on Skype and
show up and try to contact you.î And that to me just letís them eliminate themselves
because they donít even have the initiative to come on Skype and find me. So I make myself
a little bit kind of hard to get and once I see those people pop-up on Skype now I know
okay, now Iíve got the people that are really worth talking to.
>> Owen: Let me see if I can summarize that a little bit. So after you go to the applicant
list, you create like a shortlist, now your diving and look at the feedback theyíve gotten
from previous jobs and see if they actually can do this job and how long did they do the
task that are similar to yours then you create a second shortlist based on those who you
liked the feedback that they got from who hired them in the past and then this part
now is youíre giving them the opportunity to reach out to you proactively. And to the
listeners who are listening to this can even come up with a different kind of test to test.
But this is your test so you get them to proactively reach out to you on Skype and only a few of
them will and that leads into shorter shortlist and now you come to the interviewing process
point, right?
>> Dave: Thatís correct. And now after doing all that, guess what you learned over time?
>> Owen: What?
>> Dave: You still donít know until you hire them. Theyíre still on trial. Youíre only
getting started when you hire them. Now Iíll give you an example. I mentioned hiring this
firm in Pakistan. When I hired them, I had narrowed it down to two firms because in this
case I wanted a firm. I wanted a Go-To leader that I could give any task to and he would
get it done. Thatís what I was looking for, something more broad, so not the limited skill
set of an individual but the part of a team.
I narrow down at two. They both look equally good to me. So you know what I did? I hired
them both. I hired them both, I gave them both the exact same assignments and that particular
time, I was developing a logo for a new website, some Graphic Design. I have some transcription
that I needed done and one of the thing that Iím forgetting now, I hired them both. I
gave them both the exact same projects and said go.
And by the time that first project was done, I knew which firm is better than the other
firm because of the work that I got back. And so I let the one guy go and said, ìIím
sorry but weíve done this project together, it hasnít been that good, your communication
wasnít what I needed and you took too long and this isnít going to work out. Iím sorry.î
And I closed that contract and got going with the one that worked. And so, youíve got to
be willing to actually put them to work and thatís when you really find out if youíve
got the right person.
>> Owen: And so, what I get from that, you get down to your shortlist and you do your
interview and now youíre about to hire them, you want to also note just to hire them out
and you want to test the nature that they were. It was going to be like the split A
B test. Maybe you now have like three candidates out of the 10 that you have paid, right? And
you just speak test on all of them and maybe you have to even pay them too to do the work.
And say, ìOkay, go ahead do the work. Letís see how it goes.î
>> Dave: Itís not that much money, right? Itís not really expensive. It probably cost
me 50 bucks to find out that firm wasnít any good, well thatís $50 well spent.
>> Owen: Yeah.
>> Dave: Now I really do that. I really hire two at the same time. Itís just in that particular
time that makes sense. Keep in mind I can hire the person number one and if Iím unhappy
with their work, I can always go back to my shortlist and hire person number two as well.
So you donít have to do it the way I did it.
>> Owen: Okay. I like this, you really broke it down and now you are at the point where
you test and youíve chosen the right person. Is there anything Iím missing in between
the steps between test and then choosing the right person? Is there anything that you want
to cover regarding this hiring process that you use?
>> Dave: We talked about it but not alone and that is actually reviewing sample of their
work. You want to get samples. You want to see what theyíve actually done and even there
Owen, unfortunately, people lie, people will give you a website that they didnít built.
So really until you hire them and put them to work, you donít know for sure what youíre
going to get even after going through all that. So be prepared. Donít expect to hit
a home run every time you hire somebody. Thatís the tip of the day right there. It doesnít
work that way.
>> Owen: And also, when you hire them, are you putting them kind of like on a probationary
basis where itís like theyíll also have to be in a steady performance in order for
them to eventually now become ìThis is really an ongoing relationship as supposed to weíre
still in a test phase.î You understand the distinction Iím making?
>> Dave: I do but no, I donít do that.
>> Owen: Okay.
>> Owen: I simply hire them with faith. After doing all that work, I assume theyíre going
to work out and do a good job. Theyíre contractors so thereís no long term commitment and if
they donít work out then thatís the tough decision entrepreneurs have to make is going
back and saying, ìIím sorry. Weíve worked together for 2 weeks or 2 months or whatever
it is and Iím just not getting the quality of work that I need or in a timely manner,
whatever the case is.î And so no, I donít do a probationary phase. I just hire them
and hope they work out.
Now, Owen, youíve got to be fair with people. I see people too often hire someone and youíve
got to take responsibility because youíve got to give someone a chance. Donít let someone
go to quickly who just needed to get to know you better. You need to understand your communication
better. And also, I canít tell you how many times Iíve embarrassed myself by getting
angry with somebody and giving a little attitude when I didnít get a project the way I expected
it to be or when I expected it to be and then finding out that my communication was poor.
I had one just very recently where I told the Web Designer Firm to hold off on a website
and then later I had given them assignment to make the logo bigger in the upper left-hand
corner of the website and they didnít do it. And I called the guys on Skype and said,
ìHey, listen. I had made this site improved.î And he said, ìSir. You told me to stop working
on the site.î I had sent him a mixed message. I never said it was go time again. You see?
And he didnít know whether he got the assignment for the logo before or after I had shut them
down. And I came in there with attitude that wasnít deserved and so Iíve done that too
many times. Iím trying much better. Weíve got to all be patient with people. Give people
a fair shot and understand it. A lot of times we make mistakes in our communication so be
willing to be patient and work through it with people before you just let them go.
>> Owen: I like how youíve gone through with your hiring process and the difference steps
in full. But Iím wondering how do you manage each stage of your hiring process so that
nothing falls through the cracks?
>> Dave: You know, actually oDesk. This is one of the reasons I love oDesk is because
it really makes a dummy proof for you. For example they track all these people. They
track it on the shortlist. If you sit too long with an open job, theyíll send you a
reminder saying, ìHey. This job has not been staffed yet. Did you still want to fill or
did you want to close it?î And so, they just make it so easy for us, Owen, as entrepreneurs
to hire people that this one of the reasons Iím so committed to hiring people through
oDesk.
Now let me throw out another little thing. They charge 10%. If I want someone to receive
$5 per hour, Iím going to pay $5.50. Now youíre going to hear people to say, ìWell,
hereís what you do. You run with it for 90 days or 2 months or 1 month and then you reach
out to them and you just hire them directly to save 50 cents.î Owen, thatís a bad philosophy.
Basically in my opinion is kind of like stealing. That service found it for you. They do a lot
of good things for you. Every Monday, they charge my credit card for all the hours that
I have to pay for the previous week. They do a lot of stuff. I feel like I get more
than my 10% worth.
And I like the fact that theyíre all in oDesk and for a lot reasons from integrity to the
management and the tools they provide, I recommend that you think a little bigger. Donít trip
over dollars to save dimes, right? Youíre already getting a great value through outsourcing
and so I recommend you stick with the service that you start with.
>> Owen: And just so you know that some of the people listening to this call now are
in that same thing where they are at the same level with you where theyíre going out and
hiring contractors on outsourcing work but there are some people who literally want to
craft the ideas youíre sharing only with the hiring process to literally turn it into
a hiring real employees that are coming in-house. Is there anything that based on what youíd
be sharing so far that such a person who is kind of hire real employee in their in-house.
Am I need to borrow from this idea and craft for themselves, is there anything they might
need to know specifically?
>> Dave: Iíll throw out a little philosophy and that is ìHire slow and fire fast.î Right?
Be careful who you hire. Now unlike the contractor situation, I have the luxury of being, ìLet
them go after hiring them if they donít perform and they understand thatís what they signed
up for and thatís life.î Now itís different when youíre hiring someone to come into your
building and sit at a desk. Youíre making it kind of a commitment to them now. They
are now excluding other job opportunities they may have taken. Theyíre coming to work
with you and so Iíd say, ìYou need to take more time even than I just described. You
need to go through all the same steps. You need to talk to their employer, you need to
find feedback. Youíve got to do all the same things you just heard from me and maybe even
more slowly and maybe you can actually do what you mentioned a few minutes ago and say,
ìHey, would you come work with us just for a week? Weíll pay you for your week and letís
just get to know and make sure you like and we like you before we make a longer term commitmentî
because hiring an employee is a higher level of commitment than hiring a contractor.
And Owen, as business owners, we have human responsibility here. Weíre providing a livelihood
for people. Itís a big deal. And too many business owners donít take that seriously.
And so if youíre going to bring someone into your building to sit in the seat and use a
desk, youíre making a commitment to them as well as they are making to you. So be even
more careful.
>> Owen: And so, maybe Iíve been thinking at this point now is if the person listening
to this is on a situation where they want to hire employees because thereís a more
longer term commitment than a situation where theyíre contractors. Even though you are
hiring contractors that stay with you long term like you just mentioned, your Virtual
Assistant in 5 years. Itís different in the sense of the employees. Maybe the person listening
to this now might have to be able to include things like drug testing, background checks
and even reference checks just to make sure that, ìHey, when I hire this person on board
and give them a job offer, Iíve done everything on my checklist of hiring to make sure that
I got the right person,î so hire slow and fire fast I guess.
>> Dave: Yeah. Taking in mind what I said earlier. Make sure itís not your fault. Donít
fire so fast that you realize, ìWait a minute, I should have been more patient with that
person.î But what I mean is, if you discover that they just canít do the job, donít let
them linger. Thatís not fair to you or them if they cannot perform. But donít fire fast
if they possibly could perform and you just need to work with them a little bit more.
One more tip, Owen, for the guy that has a real business. I had a real business. As a
matter of fact, I built up a businessÖ
>> Owen: You have a real business making $900,000. Letís get that straight so the people will
understand. You have a real business itís just youíre going about is different.
>> Dave: Got you. It is a real business grinding virtual.
>> Owen: Yeah, online. Virtual.
>> Dave: Virtual, right?
>> Owen: Yeah.
>> Dave: I have a brick and mortar business. And from 1993 to 2000, I built that business
up and I sold it for $430,000 in 2000. Itís actually kind of cool. Thatís the first business
I sold. But I learned something in the last 2 or 3 years of that business that I would
do again if I had a brick and mortar business and that is, I hired an employee leasing company.
They did my payroll, they helped me with the hiring, they provide Human Resources. I highly
recommend it.
Itís kind of like a glorified payroll service but itís better than that because they actually
lease the employees to you. And so they are full-time to you. They are just like any other
employee except as a small business, you can have the power of a big business. For example,
I had a guy crashed a vehicle while he was on drugs while working for me. And I had the
employee leasing company and they were able to walk me through the legalities of it. Do
I need to fire him? How do we take care of insurance issues and whole of that, it was
wonderful! If I had been on my own through that, I would have make different decisions
and probably wrong decisions. So check into an employee leasing company if you have a
brick and mortar business. It can work out well for you and for me.
>> Owen: I like that because what I find from that is even if youíre going to hire the
employee out, right? There are some things that you donít want to concentrate on like
HR, benefits and all of these things that even some states might even require.
>> Dave: Yeah.
>> Owen: So there are companies out there that provide this stuff for you and you could
just lease on them and they can help you manage the aspects of HR benefits and all that you
donít want to focus on but they will help you manage it while you and your employees
focus on stuff that drive revenue, the more than important parts of the business I guess.
>> Dave: That is exactly right and just like you said we were able to offer health insurance
and every other things that I could never have provided as a small business owner. That
business we had about 14 employees, it wasnít very big. We had a 6,000 sq. ft. shop. We
had a few vehicles. So a small business did about $1,350,000 our last year to give you
an example of the size of the business and that size of business is tough. Itís hard
when you have a lot of employees to provide very much. And so my employees were able to
go directly to the leasing company to get a lot of benefits I couldnít have done. Yeah.
Itís a great concept.
>> Owen: And I really enjoy the fact that you can walked us through this whole entire
hiring process you have on your current business and also share some ideas that someone was
hiring an employee and maybe a brick and mortar business, you know, ideas that you can use.
And now weíre done with the hiring part of the interview. I want to talk more now about
your systems because we are telling the audience that you had basically systematized your entire
business and literally run without you for the most part. And we want to just ask you
a couple of questions regarding that as well. So what kind of challenges did you have initially
when you are trying to create systems for your business?
>> Dave: Well, I had a lot of challenges because thatís not me. Iím not a numbers guy and
Iím not a systems guy. Those things are not natural to me so I had to overcomeÖ Iím
more of the visionary and the marketer. And guys like me, we love to create sales funnels
and do advertisements and all that kind of stuff. But to do anything that is methodical
and systematic was against my nature. So the first thing I had to overcome was my own weaknesses.
One of the things that really helped me was a book called the E-Myth by Michael Gerber
and all the buddy goodie. I spent enough long time and that helped me to get into system
thinking. And so, that was the biggest challenge, it was myself. IBMís old statement, ìThe
system is the solution.î Itís so true and as entrepreneurs we have to remind ourselves
when something goes wrong and something not going how we want it to go, we donít need
to look usually past the system. Itís usually not the fault of a person. Itís rarely the
fault of anything except a system breakdown. And so we have to adjust our thinking to that.
>> Owen: So anytime thereís an issue, itís an opportunity to go back to the system that
you have to figure out why is that the issue because itís not a person problem, itís
a system problem. Thatís what Iím getting from that.
>> Dave: Thatís right and thatís a certain philosophy, right? Itís a way of thinking.
Itís not necessarily true but itís effective. You see what Iím saying?
>> Owen: Definitely. If we go through the hiring process, Dave, you have which has helped
us to screen out to get the right person. Now, so letís say everything worked out correctly.
Now you have the right person. If thereís a problem now you can no longer blame the
person. Itís more about the system. So thatís why the hiring process that you covered is
very important.
>> Dave: And thatís the opposite of how a lot of people do it, right? Theyíre always
blaming people. And the owner of the businesses is saying, ìWell, whatís your fault. Thatís
your fault. Thatís your fault.î And this way of thinking, they say they may be right
but thatís not effective instead you want to think the system is the problem. How could
that person have succeeded in a better system? And so even when it is the personís fault,
we donít call it the personís fault, we fix the system in which they perform.
>> Owen: Yeah. And thereís so much noise in the background. Can you get that noise?
I cannot even mute the noise. But anyways, letís go ahead regardless of the noise in
the background here. One of the challenges that you had was the issue of communication.
How did you solve that problem especially how do you even teach your employees to better
communicate? That was one of the things that you mentioned during the pre-interview.
>> Dave: What I did is I started using a service. At first we started using simple docs and
communication that everyone else uses like e-mail and we became power users of Google
Docs, itís now called Google Drive as Iím sure you know. But we would use spreadsheets.
We would keep track of systems on their docs who would share those with everyone that needed
to be shared with them and we ran a long way down the track with that. But finally, on
the big part that was missing was task management and assigning task and follow up on task.
So my business kind of outgrew the whole Google Drive thing. The tool that I use now is called
Basecamp. And Iím sure youíre familiar with it because youíre in that genre of sets of
rules.
>> Owen: Yeah.
>> Dave: And we use that tool and in that tool, Iím able to create documents, the document
processes. I can upload videos that describe how to do certain things which we do a lot
of by the way. Iím able to give the tasks, involved with the tasks, it automatically
sends me a daily recap of everything that happened on every project that day and Basecamp
is a huge part of our system now.
>> Owen: And one of the things I want to find out is can you dive me into more details about
what systems you have in place to enable all your employees to know exactly what to do.
Iím assuming that most of the stuff happening on the recurring from reaccredited basis is
that the case and have you documented the way to get stuff done?
>> Dave: Well. Thatís a hard question to ask because in the one hand mind, the initial
reaction is what you just do. You just have to detail out. So letís go back to the original
job description. You remember we talked a lot about the skills they needed to have and
what they would be doing. So think about that. How well did you do that because ideally what
you laid out for them on day 1 is what they will be doing and so much of it should already
be explained to them other than the details of how to implement it in your particular
business?
So for each Basecamp project we include the right people and then we also we include things
like their job description. I actually included a piece of job description and sometimes I
go and review that with someone and say, ìHey listen. Letís review all the things. Because
you know what I found on time and time again is there might be 10 specific tasks that a
person has to do on a daily basis for example.î And 3 weeks into the job Iíd be shock if
they have mastered more than three of them and it needs some review. And again, donít
assume.
Hereís a saying for you, ìTelling is not training.î Donít assume that because you
trained someone thoroughly one time that they are trained, thatís a bad assumption on your
part and itís unrealistic. Neither you or me or anyone else on the planet can sit and
listen to instructions for an hour, remember them all and execute them perfectly for the
next month. This is not possible and yet as business owners, we sometimes expect like
a, ìHey, you dummy. You should have known that. Come on. I told you that on day one.î
Well thatís not fair. Telling them that on day one is not enough. Thereís got to be
repetition, reminders, follow up, interviews. ìHey, letís talk about your job description.î
Iíve got an employee right now thatís been with me. Itís a very high level job. As a
matter of fact I donít believe I did this. I totally forgot to mention and heís local.
I have a local employee for Escape the Matrix. And he is my assistant on the radio show and
he has many things to manage in his world. His name is Dan. Heís always very talented.
Iím very to have him onboard but Iíve got to tell you that at least weekly right now,
I have to review the entire list with him because itís so overwhelming and because
thereís detail in there that is easy to miss.
So I have to be very patient and never think, ìHey, I told you this.î Because again, thereís
a lot Iíve told him. I canít expect him to remember it all and there are different
levels of learning. Learned knowledge or like textbook knowledge is the fundamental first
year of learning but until you go out there and implement it a little bit, you donít
really learn it, right? Itís like teaching swimming lessons in a classroom. You can describe
water to the children, you can talk about what it will feel like when they jump in,
the sensation of the cold and the water and the floating. You can describe all of that
in the classroom and it means nothing until you throw them in the pool.
>> Owen: So I get that youíve documented for all of the different aspects of your business,
how tough it need to get done. Is that based on the fact that you knew how the task should
be done thatís why you documented them? I guess maybe the question I intend to ask is
in situations where you donít know how the tasks seems to get done, how do you still
systematize and document it for those who were coming to do to work?
>> Dave: Thatís an excellent question because keep in mind. Some of the people I have on
bus, Iíve got Stan who is a PHP Developer who is very talented and I donít know what
he does. All I know is the result that I want. I canít micromanage him because I donít
know his world. The best that I can do is describe to him the end result that I want
and thatís where we can back to ìDid I hire the right guy?î because if he doesnít understand
what I wantÖ I may understand how he did the programming and how the code works, all
I know is, ìJust do what I want you to do or not.î And in some cases itís going to
be beyond your ability. Youíre not going to understand how they do what they do in
case of a developer or a graphic designer for example, and some are building you an
app or whatever the case might be.
And so in that case, thatís where it comes right back to ìDid I hire the right person?
Is this person capable of building what I want?î Iím putting my confidence in them
and I may understand every moving part in their world. So Iíve got to depend on them
knowing the job. In other cases, I know the whole job description inside out like my Customer
Support Reps. I can train them personally. I can know exactly everything they have to
do. I knew the tools that theyíre going to use. I can easily train them. I can listen
on some of the actual live phone calls that they make to make sure Iím happy with how
theyíre answering the phone, etc. I can monitor. We use a service of, what is it called? It
will come to me. But we use a ticketing service, OS Ticket.
>> Owen: Okay.
>> Dave: Thatís part of our systems so our customer can create a ticket, my rep can respond
to the ticket and I can go in there anytime I want and see how did someone sort of respond
to this ticket, what question was asked, how was it answered? And so thatís the monitoring
that we have to do to make sure theyíre implementing correctly. So we create a great job description.
We then have documents within Basecamp that they can easily access on what the details
of it are.
Also Owen, one of the other things we found is that accessing tools can be a problem.
You know, there are a lot of tools that we use on my marketing, log-in details, etc.
And so thatís also another thing. We actually keep a document with every project for all
of the log-in details of a person would need for whatever tool they would have to use.
So those are the types of documents and lists that we keep to help them get their job done.
>> Owen: And you also mentioned because one of the things that youíve actually kind of
said is on some cases you know how to work as getting is documented but then you also
have to monitor and track that when it gets done because after the training itís also
them doing the work and as theyíre doing their work, youíre tracking to make sure
that they deliver. And then the other case where you highlight the PHP Developer where
heís doing stuff that you have no idea how to do, you are still tracking to verify the
results to make sure that, ìHey. This person is delivering what you want.î
And Iím curious, are there any other ways in which youíve tracked and verified the
results delivered by your employees? I think you mentioned something about tracking based
on revenue thatís generated on the business, something about Google Analytics if you can
remember. It can explain that.
>> Dave: Well, Google Analytics is how we track the end result. If all of these works
doesnít lead your revenue, weíre doing something wrong, right? I mean, itís one thing to be
busy and to get all these tasks done. So in my particular business, it happens to be a
very task-oriented business. Give a task, get it done, follow-up next task, sometimes
issuing 5 or 6 tasks in times where weíre very task-oriented. We donít use a calendar
very much. Most businesses probably use a calendar a whole lot more than we do. Weíre
very task heavy and at the end of the day, yes. Google Analytics is the key, did all
the tasks that we gave out and all the assignments to build a website and make it function end
up in revenue?
And if it didnít end up in revenue, weíre in trouble. Now Iíve been around the block
with this and Iíve got to tell you, the fact is most of the projects I set up to do fail.
Itís just the way it is. Most websites I think were a great idea. I put out there,
I spent money on them, we go for it and a year later, theyíre not making much money.
And so, thatís part of the difficulty of online marketing is not everything you think
is a good idea is a good idea. So at the end of the day, we have to be determining, ìOkay,
weíre tracking this. This is how much money weíre bringing in. At what point do you pull
the plug? And thatís an important decision as an entrepreneur that at time youíve got
to make.î
I pulled the plug on a project I put over $20,000 into just recently because we just
could not get it to fly and finally I just had say, ìWell, the opportunity cost of working
on this and not working on something thatís probably better is too high and yeah, we learned
all that from Analytics and from the bank account, it wasnít generating the cash.î
And so at the end of the day itís Google Analytics. So Google Analytics is one of the
best online tools out there. Owen, a lot of people are not using it and if they are using
it, theyíre not using it fully.
The E-Commerce functionality of Google Analytics is unbelievable and I canít tell you how
many small businesses I see that have Analytics on, they know how many people visited their
site for example but they havenít linked it to their shopping cart, major mistake,
you wouldnít believe the data and what you can learn from turning on the E-Commerce side
of Google Analytics.
>> Owen: And so, I think one of the things I want to also find out is now that you have
so much free time and that your business is running without you. Iím curious, whatís
kind of the longest time that youíve been away from your business and not to even had
to do anything working in business. Whatís the longest time youíve been away from your
>> Dave: The longest period Iíve been away for my business and completely disconnected
because you know, thereís times Iím away but Iíll check e-mail and Iíll take care
of business during the day, right? But the longest time Iíve been totally disconnected
was 11 days. We went on an Alaskan Cruise from Seattle. We cruise from Seattle to Alaska
and literally I didnít even try to get online. I just left my business a 100% but Iím thinking
about it. Me and my wife had a wonderful time on this cruise. It was amazing.
And I came back and of course, one of the things I was wondering was, what kind of fires
might have started that need to be put out by me and what kind of problems might happen
to my business because it was a real good test of how automated my business was, right?
And Iím happy to report that I was able to come back and fire up my computer and check
in and find out that nothing had happened that hadnít been taken care of by my team.
Weíve made just as much money as I would have made if I stayed home and that was a
beautiful experience. The world didnít fall apart. Everything happened and my whole business
functioned and for 11 days, I wasnít even checking an e-mail and so that was a great
epiphany.
>> Owen: And so now that you have so much free time on your hands, where do you spend
most of your time in your business? What do you focus on in your business? Not that you
are not literally have to work inside of it. What do you do most of the time?
>> Dave: Most of my time, the first place I go to when Iím ready to go to work is Basecamp.
I go into Basecamp and I often start with a review. If thereís a particular task thatís
really important to me at the time, Iíll usually go to that project first and get an
update. The second place where Iíll go to when Iím working my business is Skype. Iíll
check in with people. This is a people business and I like people.
Iím not trying to automate my business because I donít like to work. For me, automating
the business is wise. Itís better to run a business in an automated fashion not because
we donít like work. I love work. Honestly, if I go on vacation for a week, really by
day 5 or 6, Iím ready to go back to work. I like work, okay. Itís not that. And I like
the people that I work with. And so, Iím just touching base and say, ìHow are things
are going, do you need anything from me, how is that project coming, any problems?î and
so touching base with a few people, going through Basecamp.
And then Owen, I think probably the most important thing I do is what you are doing right now.
Itís content creation whether thatís recording content, creating videos, going through our
Facebook pages. I feel like the best thing I bring to my business is the content. I can
do that better than anyone else on my team. Thatís why I do a radio show for example.
On the radio, I can produce content in an hour that now creates all the status updates,
tweets and facebook posting that my team is going to do for the next week. And so at one
hour of content generation, we generate anywhere from 5,000 to 7,000 words and from that, we
generate all the social marketing that we need for the next week. Thatís a high level
task that I maintain control of myself is a content creation and the one that I enjoy.
So thatís kind of my job. And then my teamís job is to distribute it and make it into a
useable content out there on the social sphere.
>> Owen: If anyone can tell. The noise on the background, Iíve been trying so hard
to keep a straight face and Iíve been pissed. You cannot come through somewhat on all these
things sometimes but anyways, we must go on even though the construction crew is doing
crazy stuff out there.
>> Dave: I think your mic has sound happening because I can hear you very clearly. The background
music has faint.
>> Owen: Oh really? Because I am going paranoid here because the noise is really loud and
Iím wondering if the audience can hear this.
>> Dave: Hardly.
>> Owen: But anyway the show must go on. And so a couple of more questions, anyone who
has been listening to this so far, started listening to the interview based on the fact
that they want to learn your hiring process so they can hire be it an employee or a contractor
but basically someone to come in to work with them. And what would you say is the very first
thing that that person has been listening so far that he needs to do now to get started
with creating and hiring process for their business.
>> Dave: It kind of ties into the last question. As youíre going to ask yourself, ìHow does
this going to make money for my company?î I have gone through periods of time on my
business when Iíve had a team of people be really busy and not be that effective or profitable.
And so weíve got to think lean and mean, right? We are small business people. Weíre
not big business people. You know, a million dollar business is not a very big business,
right?
>> Owen: Yeah.
>> Dave: And for some people listening right now if they have a little home based business
and theyíre thinking, ìNo. Thatís really big to me.î But trust me, itís easy in this
size of business to waste time. And so we donít want to do that. And so, part of the
key to this is knowing what youíre going to do and how thatís going to drop revenue
to a bottom line. So make sure that you understand the effect. Is this the person you need right
now or is there a more important role that has to be fulfilled in your business? What
is the biggest obstacle in your business that you need to overcome to reach your financial
goal and make sure youíre hiring towards that? Honestly, itís easy to hire someone
to do staff only to find out that that staff isnít effective and isnít going to make
you money. So you want to be careful if you hire the person thatís going to do the right
stuff for what your business needs right now.
>> Owen: And also, my listeners are always asking to ask my guest. You know, what books
are and had the most influence on you and why? You named the E-Myth but is there any
other book that comes to mind, as maybe who can help with hiring process thing.
>> Dave: Let me turn into the desert island question. If I was on a desert island and
can only have three business books, hereís what they would be. The 4-Hour Workweek by
Timothy Ferriss, Think and Grow Rich by Napoleon Hill and The Slight Edge by Jeff Olson. And
those three books Iíve listened to them, I have all three on audio and I have all three
in book form and Iíve listened to them and read and reread them and those books have
shaped my life literally.
And you know, I highly recommend all three and not only that, Iíll have you recommend
exactly what I said. This is inexpensive. People go and they spend a hundred thousand
dollars to get an under-graduate degree in an MBA that had a great college and honestly
donít come out up there with the power and knowledge and philosophy they could get from
reading those three books. It would cost a person, what? 50 bucks to get the physical
version and listen version of those three books and they have made a huge influence,
a huge impact on my life and I revisit them again and again and again.
>> Owen: Awesome. And what is the best way, Dave for the listener who has been listening
to this all the way to this and regardless of the noise going out with the construction
that weíve been listening patiently hearing everything and wanting to go out there to
implement. Whatís the best way for them to contact you and thank you for doing this interview?
>> Dave: You can send me an e-mail at Dave@EscapeTheMatrix.net. You can contact me at our website, EscapeTheMatrix.net.
And by the way, we have a lot of great resources there for small business people. Iíve been
told many times that our blog post, we had to charge money for and so I take that as
a great compliment. So if you want some free great training on entrepreneurship, go there.
But yeah, Dave@EscapeTheMatrix.net. Iíd love to hear from you. Iíd be happy to answer
your questions or do your podcast, whatever the case maybe. I enjoy this Owen and I know
you do too. I enjoy both interviewing people and being interviewed. We both learn through
this, right? I had to think through my answers on how do I do think and thatís good for
me and hopefully good for your audience. Yeah, Iíd love to hear them.
>> Owen: Definitely. And so, weíve been listening to this interview so far and if you know another
entrepreneur who will find this interview useful especially the part where it has to
be with creating a process to hire people for their own company, please share this interview
with them. And if you knew any other entrepreneur who has systematized the entire business,
please let me know. I would love to bring on the show and interview them.
And one more thing, Sweet Process is about helping you create a system that will allow
you basically to document is that it how repetitive task has to be done in your business so you
can systematize your entire business. If you want to state your business where you have
to systematize the task in your business, go ahead and sign-up for the free 14-day trial
of Sweet Process or if youíre not at that stage yet but you want to understand the basics
behind systematizing your entire business, go to our blog and sign-up for the checklist
that will help you understand which task you need to systematizing your business and why.
I hope every you have enjoyed this interview as I enjoyed interviewing Dave. And, Dave
thanks for doing this interview.
>> Dave: Thank you so much. Itís been fun.
>> Owen: And weíre done.