September 26, 2014
We’re going to talk about something that can be a bit scary for entrepreneurs. Letting go and letting other people run your company.
It’s funny because employees in the corporate world are always looking to maximize their sphere of influence (or power). As entrepreneurs, we look to divide or pair down our areas of responsibility into slices that OTHER people can run.
In this episode, Joe and I dig into how we split business responsibilities, determine it’s time to hire, and ultimately replace ourselves in our own business.
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“You need to be getting more out of a partnership than either of you doing it alone.” – Justin – Tweet This!
“Avoid the misconception that your way is the best way.” – Justin – Tweet This!
How do you feel about loosening up the reins and trusting your processes? What employee breakthrough stories do you have where the student became the master?
Justin: Welcome to the Empire Podcast. Episode 111. An entrepreneur’s journey is one of constantly replacing himself. In this episode, we’ll be digging in to how we split business responsibilities, how we determine its time to hire, and how we ultimately replace ourselves in our own business. You can find the show notes and links for this episode and more at EmpireFlippers.com/divide. All right. Lets do this.
Announcer: Welcome to the Empire Flippers podcast. Are you sick and tired of gurus who have plenty of ideas but are short on substance. Worry that e-book you bought for 17.95 won’t bring you the personal and financial freedom you long for? Hey, you’re not alone. Join thousands of others in their pursuit of niche profits without the bullshit. Straight from your hosts, Justin and Joe from Empire Flippers.
Justin: So, we’re going to talk about something today that can be a little bit scary for entrepreneurs. It’s basically letting go and letting other people run your company. It’s funny because employees, you know, in the corporate world, you know, Joe you and I both we’re looking for ways to like maximize our sphere of influence or power. Lik, the more we can get, the more we can take home, the better it would be for us but as entrepreneurs we’re always looking to divide or pair down our areas of responsibilities into slices that other people can run. So, as employees we’re constantly looking to expand our sphere and as entrepreneurs we’re constantly looking to replace our sphere and like chunk off pieces of that to hand off to other people. And I think that’s an interesting distinction.
Joe: Yeah. I think that’s because as employees you start with nothing or you know 5%, and so you want to gain more and more. But entrepreneurs start with 100%, and so they have to slice things off if they want to grow.
Justin: It’s also interesting too, I think, to look at the different between what we consider a business and like a professional service provider. A professional service provider may look to constantly tweak or improve a particular task or skill set, right. So, they’re constantly getting better and better at that one skill set where as an entrepreneur is looking to replace himself in different skill sets. So, you know, you have the professional or the master that’s really looking to master one task where as an entrepreneur there are so many different hats to be wearing, that you’re not looking to master any particular task. You like to hire people that can come in and do a better job than you were able to at each individual task or responsibility.
Joe: Agreed. It harkens back to that episode we did on is your business really a business kind of thing, right? And definitely if your business is a business, you’re going to be replacing yourself in different areas.
Justin: So, I really like this episode because we’re going to get into how you and I split up the responsibilities. Kind of the challenges and the way that we go about doing it, and then we’re going to talk about how we’ve determined it’s time to hire. Like, how we see the writing on the wall. We see there’s opportunity to hire and replace ourselves. Then we’re going to get into how we actually go about doing that.
Before we do that though buddy, let’s take a peek at your featured listing of the week. What you got buddy?
Joe: Yeah. So, this week we’re talking about a smaller marketing blog in the college business niche. So, basically, it’s a blog where he writes articles encouraging entrepreneurship and showing them the way that they can make money online to college professionals. It uses an affiliate program to promote some of its businesses. It also has a self-written e-book that it promotes via Warrior Forum special offer. And it uses those two things combined to make pretty good profit. 600 bucks a month so it’s not bad. It’s completely passive and maybe add just a little bit of content here or there. It includes the Warrior Forum account that a lot of the sales come from the e-book offer. It’s making it about 4000 page views a month and even has a subscriber list over a little more than 500 subscribers. So, I think this is a great site for people who really want a business that uses different [monetization 00:04:00] strategy from the same old same old of ad [inaudible 00:04:04] and Amazon. They’re looking for something a little bit different but not something so big that they can’t wrap their arms around it.
Justin: I can a younger guy or gal too looking at this and saying it’s relatively easy. I mean it’s really blog based, right. So, if you’d like to write some content, take over a site that’s already earning money and try to expand it with additional content marketing, I think that’s cool. The domain name is really brand able as well. I really like that. I think if you’re looking to take over a blog and expand it over the year to two years, I think this is a great opportunity. It’s not a huge earner at 600 bucks a month but the earnings are stable, and it’s got a relatively good traffic, stable traffic. Might even be a good pick up for someone kind of looking to learn the ropes and get into this.
Joe: Yeah. Talking about brand ability. One thing that the seller hasn’t done is he didn’t use his own face or his own persona on the site. So, like you said, the domain name is very brand able. You could become the face of this site, and you would be known as The Guy.
Justin: I wonder — Did he just do that for saleability? Do you know Joe? Because like I think that this site would have been way more successful by putting a name and face to it. It’s just it’s one of those sites. It’s kind of surprising actually.
Joe: Yeah. I worked with the seller on that. He just says he’s kind of a private guy. I mean that was kind of the thing is it wasn’t a lot about him online either personally.
Justin: Is he a college dud or is he like, you know, that’s funny sometimes you get these sites written about college entrepreneurship run by a 55 year old house wife or whatever. Is that the case?
Joe: No. He’s recently out of school.
Justin: Got you. All right man, lets dig into the heart of this week’s episode.
Announcer: This is the Empire Flippers podcast.
Justin: All right, buddy, so we’re talking about divide and conquer. We’re talking about how to split up responsibilities, how to really grow out your business, adding team members. We’ve got a lot to cover. Basically, we’re going to cover this looking at five different areas and it’s kind of a process for getting this done. We’re also going to look at some additional considerations for things to keep in mind as you’re dividing and conquering. So, the first point we want to talk about is splitting your responsibilities with a partner. Now, we’ve talked a lot about partnerships. We’ve talked about some of the risks, some of the miserableness that comes with having a partner, some of the benefits so we’re not going to get into that all that much. I’m just going to assume that you either do have a partner or you’re looking at taking on a partner for this particular piece. And I think we can speak well to it because it’s something that we’ve had to do in multiple businesses now.
Joe: Yeah. I definitely think playing to each other’s strengths is going to be a huge part of splitting responsibilities with a partner. So, you know, that’s something that is just naturally going to happen but you guys should sit down and write it out. Take a piece of paper, figure out what each other’s strengths are but then also be adaptable, and be willing to [inaudible 00:06:51] you’re not so good at something, and the other guy wants to take a try at it.
Justin: The other thing too to be careful with with a partnership — And first off, if you’re getting into a partnership at all, it has to be a one plus one equals three situation. It can’t be — I mean if you could do half the — you get half the value on your own, you should probably do that. So, you need to be getting more out of the partnership than either of you do alone. But one of the important things to consider when you have a partnership is you don’t want to micro-manage your partner. So, your partner has his strengths or her strengths and they’re working on that, and they’re doing their thing. You don’t want to be, “Oh, I could do that better”, and Joe there are times when I look at some of the work you’re doing and I’m like, “Oh my God, dud, why did you do — I could have done that better.”
At the same time, I’m appreciative of the fact that you own that, right. That it’s your responsibility and that I’m like, “Ah, that wasn’t done the best,” but I shut my mouth and let you do it because that’s the agreement that you’ve come to. And that, I think, ultimately helps our business. If I was digging on you every single little thing that you did or you’re doing that to me, I mean, we’d be so frustrated with each other. We wouldn’t be able to get anything done.
Joe: Well, I think we’ve learned that over time. I mean we used to do that a lot to each other in the beginning of our partnership but we’ve learned over the years that even though it’s maybe not the way that you would have done it personally, the other guy’s taking care of it and even his 80% is better than you trying to do everything. So…
Justin: Yeah. Or some of the things just wouldn’t happen at all, right. It’s like oh my God, I could do this better than him, right? But then, oh shit, I got all these other things I need to do. Right? So then it never even gets done. So, yeah. I mean that’s I think a real value. And if you want to maintain that partnership, you just got to leave each other alone in your areas of responsibilities. Once you’ve divvied things up to your strengths, you just got to give him a break.
Another thing that you and I have been through quite a bit is the understanding how the eb and flow of work, right. There’s going to be times where I’m working way harder than you. There’s going to be times where you’re working way harder than me, and you know, if you get to the point where you’re keeping a tally of hours, and like how many hours did you work this week or this month. Yeah. That’s going to be bad because there’s just going to be where that switches, and that can cause a lot of resentment in the partnership.
Joe: Yeah. I think this just comes down to trust. If you have trust in each other, then you know that you’re both going to put in your fair weight and your fair share of the work. It’s when you don’t trust each other that this really becomes a problem, and becomes the classic race to the bottom kind of thing.
Justin: That’s really true Joe. I was thinking back to the times where we’re kind of picking at each other in terms of like how many hours you spent and what you’re working on and who’s putting in more hours, and those were periods where there was a lack of trust in our partnership, right. There were some issues there. And so, yeah, I think that trust factor comes into play and you know at some point you do have to trust your partner. I mean if you’re checking up on them all the time, that’s just — that’s not going to work. You’re going to be doomed for failure there.
And another thing you can do, and this is especially earlier on in a partnership, is meet up on a fairly regular basis to re-evaluate those responsibilities. So, if you’re just starting off and like not daily or whatever but maybe once a month, and you kind of like see and make sure that the split of responsibilities is good, make sure that everything is getting done and handled appropriately. And if not, be open to taking on more or passing some off if your plates too full to make sure everything gets done.
Joe: Yeah. I’m going to have to say more than once a month early on. But yeah. It’s definitely going to require some face-to-face work in order to build that trust that the partnership works later on. And definitely having that available will make it easier. It can be done remotely. There’s plenty of people who have done it but I’m just going to say it’s more difficult.
Justin: Yeah. We’re at the point now where we probably do that every 3 to 6 months, kind of just depending and where we kind of re-evaluate what we’re working on, who has what tasks, and how we can take things off our plate. And I think it really helps to have some empathy for your partner, so kind of understand what their work load looks like and rather than trying — This can help too. Instead of looking at what you can off load from your plate, looking at your partner’s plate and seeing what they should be off loading because sometimes it’s easier for you to see what someone else should be releasing to employees or virtual assistants or whatever than it is for them to see themselves. So, like, looking at each other’s work load and determining what they should take off their plate, I think, can be key.
So, the second point I want to talk about is how to determine you’re ready for that first hire. As I mentioned, as well, that first hires are critical. I mean you’re bringing someone in to your business that, assuming the business continues to grow, is going to have a very major say and position in your company as you move on. It’s really important to determine that or to say that cash flow is steady. So whatever the project is or area of responsibility, you’re going to want to make sure that cash flow is steady and it’s regularly coming in. And that you’ve also got margin for that hire, so if you’re someone at let’s say $4,000 a month, $3000 a month and you’re not making that much to pay their wages, you’re in a race to the bottom. You’re going to be scaling an unprofitable process.
Joe: Yeah. And then also I’d have to say there has to be some buffer room in there right? A lot of people don’t plan for the unexpected and having a little bit of buffer room especially when you go down the hiring route is crucial because you don’t want to miss payroll. Once you miss payroll, you lose trust and it’s really hard to regain that again.
Justin: Yeah, so you want to make sure you have enough cash. You want to make sure there’s margin for the hire. You also want to make sure that you have some repeatable processes established. So, there are some things that they can step into and take over, and that you can explain to them and walk them through the process to get them up to speed. Now, that’s not to mean that you don’t leave any room for growth or expansion. You are going to want to have some areas in that piece that they’re taking over that have some open ended approaches or paths to explore. You want them to have kind of that freedom of flexibility. But you do want some structure. It’s a lot easier to bring someone on and get them up to speed with repeatable processes, so that they can get comfortable, kind of get their feet firmly planted on the group. And then start to explore kind of the open stuff, the things that they can take even further than you were able to take it.
Joe: Yeah. I love this tip, Justin, because its so true. If you have the processes for them to master, and then they can go ahead and figure out how to use those to make the company better, that’s the sign that you’re going to have a successful employee.
Justin: So, to be a bit more specific about this, at least in our business, right, so we bring Mike out here who’s our marketplace manager. And we’ve got some established processes for him to work with in terms of our support team. So, they have SOPs that they roll through. There are specif ways they handle things, and so getting up to speed on those things is relatively easy. Some of the more open ended stuff would be how do we attract and find new sellers, new buyers. Like how does that look. How can we provide even more love and care to our current customers. And so those are some of the open ended questions that we left for him to explore and kind of take it further than we were able to take it. These are things we wanted to do but you and I simply had too much on our plate to really explore. And Mike now has the bandwidth to make that happen.
Joe: Yeah and he’s coming along great. And I think that setting up the SOPs for that was definitely a successful thing. He’s living with me now, and I’m definitely running him hard so…
Justin: The third thing we want to talk about is using the skill transfer to process to replace yourself. And we’ve talked about this. We’ve talked about this a bunch actually. So, if you go back to episode 17. We did a whole podcast on the skill transfer process. We also have a blog post on building human machines that we’ll link to in the show notes that you can check out but basically, and what a skill transfer process does is allows you to transfer skills with minimal loss, minima packet loss, right. So, you’re able to pass of this skill to someone and they can retain 95% efficiency. If you do it right, sometimes they can actually improve on the process of making it better over time.
Joe: Explain. Demonstrate. Practice. Observe. Feedback.
Justin: And these are things that we keep in mind when we bring on new people, when we’re getting them up to speed. We make sure that we’re patient with people to kind of like walk them through the process, and that can be difficult. It can be stressful sometimes because even smart people can be dumb on certain things, right. So, you’re explaining this process and you’re demonstrating how it works, and you’re allowing them to practice. And they just get stuck on some certain step. And you’re like oh my God, so you just got to patient with them. You got to continue through the process and trust that the skill transfer process is going to be the best way to get the information to them and get them up to speed. It’s important I think to get this right because if you successfully transfer skills, that’s going to pay dividends for a long time down the road. Same thing if you screw it up, right. You’re going to end up transferring these skills to someone who will then pass it on to someone else, and you’re going to end up with a line of people that didn’t get it right. So, you’re going to want to make sure that you practice this, that you get good at it, so that you can keep your organization running smoothly.
Joe: Especially those early employees. It’s really important that they learn the fundamentals correctly. We’ve made this mistake before where we’ve brought people on, didn’t do proper training, and wound up them training other people badly. It just leads to a bit of a train wreck.
Justin: And the fourth point, I think this is really important as well, is that you need to empower your team to own it. And, the way this works is that they have to have a really good, a really deep understanding of your company culture and your mission. So, for example, we have Vincent working with us. We have Mike. They know generally how we respond to people, our approach, our mission, kind of what we’re looking for because they’re involved in our strategy meetings. You know, we talk about this on a regular basis with them. Like, we’re not man behind the curtain type stuff. They see kind of where our business is at and our business philosophy, and I think that’s really important that they understand that because it empowers them to make decisions because they know where we’re going. They know where we’re coming from.
Joe: Yeah. I mean I think Dan over at Tropical MBA does this right, too. He’s so transparent that right down to the money, he lets people know how things are working. And I tell you, we’ve started doing that here, and it really really helps.
Justin: Yeah, so the more they understand about your business, know your mission and kind of know your philosophy, the easier it is for them to match that and make sure they’re in line or their personal answers to people, their conversations are in line with the company’s philosophy and goals.
Joe: And if they’re not, you know, that’s an easy way to self-segregate and filter out people that are just not going to work for you.
Justin: I think it’s important too to give them the authority to make change, to make change happen in your business. And actually probably better than giving them the authority is having them take it, right. Having them come to you and explain to you like how they’re taking it in your business. I love to see that. I love when our team members come to us, and they say, “Look, I saw this was messed up, right, and rather than come to you and ask you if it would be okay, here’s what I did to implement it. Here’s why it’s better.” That I fantastic. Don’t you love that?
Joe: I love when that happens. And it definitely… It’s a good sign of a person that we definitely want to promote. We want to give them some more authority. We want to give them some more responsibility. Give them the ability to make decisions.
Justin: This could be like financial authority, right. So yes, you have a budget or you can make $500 decisions or whatever, just do it. You don’t need to ask us. Or it could just be flexibility, right, like in terms of their working hours, in terms of which customers are able to step in and help. It could just be offering them the right to be wrong. Giving them the openness to make mistakes, and come back, and you can work through it and discuss it. But they know that they’re not going to be admonished for making a silly mistake by making a decision. We’d actually prefer them to start making those decisions. Really, early on, any decision even a wrong one is better than no decision. Right, Joe?
Joe: Yeah. I definitely was going to say that is that when people come to me and they come to me with some sort of plan or some sort of way to improve things. Even if I think they’re wrong, I love the fact that they spoke up. They came to me with something that they could do better. It shows me that I have something to work with rather than the worker drone that’s just going to sit there and try to get things done, task by task.
Justin: And that’s one of the reasons, like when Vincent or Mike or whatever, they make a decision and it turned out to be one that we didn’t prefer or that we think might not be right for the company, we’re pretty careful not to jump on their back, right. We’re pretty careful not to beat them up about it too badly because we like the fact that they made a decision at all. So, there are a lot of people that won’t make decisions, and they’ll keep coming back to you and asking you. And I think there are roles for that but you’re not going to want that with some of your earlier hires, some of the people that have– That you want to take some responsibility and grow your business. You’re not going to want them to constantly come back to you and ask for permission. That’s problematic.
All right, so the fifth we’re going to talk about is what do you do now, now that you’ve replaced yourself, now that you’ve got someone else working on some of the tasks and responsibilities that you previously had. What do you do with this free time? One of the things that we love to do is to focus on new projects. So, one of the things I’m working on and you’re working on right is the investor project. And that’s something that we’re looking to roll out, and we want to put our best foot forward there. We want to have the best chance for success. So, we’re injecting ourselves into that process to make that happen. And eventually we’re going to go through this entire process again, and replace ourselves there. But we want to be personally involved in this to give it what we think would be the best chance to make it work and to really test through it.
Joe: Yeah. I think talking about free time, one of the things that you should always realize is that expanding your business can be a full time job. And I’m not just talking about marketing or sales or bringing new business. I’m talking about actually building out your business. So, that’s working on business, not in your business, that classic cliché. And that’s what I would do with my available time is like Justin said new projects but new projects that help me expand my business.
Justin: So, expand the empire, right. Another thing you can do is after you have kind of passed off some tasks and responsibilities, you’ve been deep in it, right. You’ve been deep in the details and SOPs and that kind of thing. It might be a good time to take a step back, and take a 30,000 foot few of your business. Where are we going? Is our direction on point? Is this really what we want to be in 2, 4, 5 years from now. When our business grows up, is this the kind of business that we want. And I think it’s a good opportunity to kind of re-examine your path and your mission. And if you need to make changes along the way to get where you want to go, then this is the time to do it after you’ve transferred some skills and you’ve cleaned off your plate a bit. You might as well step back, make sure that the train is chugging in the right direction, and then you can get back in and do it again.
All right, Joe, so lets talk about some additional considerations. As we were coming up for the notes for this show, there were a couple of points that we thought we wanted to highlight. We thought were important. The first is is to avoid the misconception that your way is necessarily the best way. And for me this is an easy trap to fall into, right. Like I think is the better way to do. I know my business, and this is the path we should take. But how do I really know that. I don’t know that for sure. I have this sense of it, and it’s me — I think it’s the classic small business owner problem where they’re constantly saying, “I’m the one that needs to this. This is the way that it needs to be.” And that’s not necessarily true, right.
Joe: Yeah. I think it’s definitely true. Especially when you don’t have the data to prove it. Like when you just have a hunch about something and you think that your way is the best way, that’s not a hill to die on.
Justin: Well, it depends — A lot times it’s not a hill to die on, right.
Justin: Sometimes it is. I mean there are certain things that you go no, dude, nope this is not happening. And I think you do have to go with your gut a bit though. Don’t you Joe? I mean, for example, we’ve talked about this before. Do you take the next year to test through it and see, or do you just go with your guy?
Joe: Yeah. Definitely don’t take the next year. We’ve made that mistake.
Justin: Should we split test this for the next 12 months, and then make a decision. Or do we just pick one now and just roll with it. Yeah. But I mean you’re right thought that you don’t necessarily know, and I think being open or flexible to your partner making decisions, to your team making decisions that maybe weren’t the path that you wanted to take but to see kind of what happens with it. As long as, I think, it’s a line with like the core mission, the goals, kind of your voice, what you guys are doing. If it doesn’t take you off that path, I think you should be more flexible to accepting it.
Joe: Completely agree. Especially if someone else can own it and run that ship because there’s only so many ships you can drive in the business. And you really have to look for the most important one. So, if there’s some part of it that they can take over and run just as well or better, then that’s something that you should give them a little bit of rope to make mistakes and correct.
Justin: Yeah, and since there are limited ships you can drive or whatever as you mentioned, when people are taking these on and you’re constantly making them come back to you and get approval, you’re still — you’re bottle necking your own company. So, you’re making them come back to you and check in with you on every single thing that they’re doing. Basically, you’ve got your ships and you’re adding more because you’re saying that I’m going to have a say in these other ships that you’re running too, and that’s going to screw you in terms of trying to really grow and scale your business. And I just say, I’m regularly amazed at how wrong I am here thinking that my way is necessarily the best way. And when things get done differently I’m like huh, I would have never thought that would’ve worked that awesome. And so, you think it’s something that you can get over pretty easily, but I think this is, for me at least, it’s a regular struggle. I’m getting better but it’s still a struggle for me in our business.
Joe: Give me an example.
Justin: Okay. So some of the things that Vincent, like some of his writing. He’ll write things. I’m like, “Ah, I don’t know man. I’m not sure I would have said that,” but it resonates with people in a way that what I would have written wouldn’t have. Or you say things Joe on a podcast that I’m like, “Oh no dude, is that really what we want to say,” but like okay, well no, I listen to the podcast back and it makes sense to me. I just didn’t catch it at the time. So, okay. This sounds pretty cheesy but yeah, dude, sometimes you amaze me with the fact that you’re right.
Joe: That’s should be the title of this episode. Sometimes you amaze me that you’re right.
Justin: I know what an egotistical ass hole but it’s true. I mean as an entrepreneur, you know, I kind of my way, I want to do it that way. And I think letting go, I’ve found some value in that. Another consideration is that, your first hires are definitely the most important. You’re going to want to make sure they count. Those first divisions of labor are going to be critical. So, maybe you and a partner, and maybe your first but these successes and failure as I mentioned before are going carry on down the line into any future divisions.
Joe: If there’s one thing you could take away from this episode besides the fact that you amaze me when you’re right is that the first employee is really the most important employee. And, you know, it’s tough sometimes for people who have never hired anyone or never even interviewed anyone to make the decision but really that first person, especially if they’re going to be with you a long time and hopefully they are, they’re going to build the whole rest of the house. They’re like the foundation. They’re the cornerstone of the rest of the building.
Justin: Well, the good news is that hiring is a skillset that you can get better at over time. So, it is something that you can improve on and you can learn how to hire better people, and these are things that you can pick up online and by studying up on it. I’d say if you’re brand new to this, it might be worth paying someone to help you. And that’s one of the reasons we recommend sources like Virtual Staff Finder for VAs is that it takes care of the top of funnel stuff. So, kind of weeding out the kind of early people. Well, companies like that do that for you. So, yeah. So, you have to make the final decision but I mean at least the general quality of person that you’re looking at that gets to you is going to be much higher than if you just went to O-desk and opened up the doors or floodgates, or craigslist or whatever.
Joe: Yeah. And even with how important the first employee is, please don’t be paralyzed by fear just because you’re unsure if you should hire them or not. You know, you looked at five different candidates and none of them seem to check all the boxes. You know, don’t be paralyzed by fear. Try to get that person in there, and at least try to have a cultural fit and a fit with the way that they’re going to work that personality fit, rather than an exact skill set fit.
Justin: Our third consideration, it’s not your team that sucks, it’s you. You need to own that. The idea is these are the worst entrepreneurs right. The ones that go, you know, when they have success it’s all them. They talk about how amazing they are but then when things get screwed they’re blaming their team. They’re taking no responsibility. Oh this guy’s a donkey, and I told him a million times you need to do it this way and this way and this way. It is your responsibility, as an entrepreneur it’s your business, own it. If they’re screwing up, that’s your screw up, not theirs.
Joe: Yeah. You can’t have it both ways. I mean we’re having a great month this month, and Mike and Vincent being here in my house working together and we’re going to talk about this later but it’s been a huge motivation for me, and I love it. So, but, I’ll take on that success but if we hadn’t had a great month this month, that would also be on me.
Justin: Yeah. I mean we are ultimately responsible for everyone on our team. And if we’re not having the success or we think that someone there is screwing up, we need to own that. I think this is said by entrepreneurs to make themselves feel more important or valuable. They’re like these guys are screwing up, everyone needs me. That attitude. That everyone needs me, I’m so important to my own business. I think this is really just a fear of like letting go or losing control or maybe even like thinking they’re becoming irrelevant in their own company. So, that’s really a fear based position, a blaming everyone else and not taking responsibility for their own company.
Joe: Yeah, I mean I could see why if you’re on that downward spiral things are getting out of control and it’s easy to blow off on other people but really the best way to stop that is to take ownership and say what am I going to do to correct things, and it’s my responsibility to take control.
Justin: Yeah. Bottom line, if you have employees that aren’t [inaudible 00:29:16] you got to fix it. It’s you’re responsibility. All right. Enough about that. Let’s talk about our fourth consideration is that the fact that the line between work and personal lives may be blurred, and that might be okay. So, you know, and this is — we can talk from our experience where. This may vary a bit depending on your personality and kind of maturity level and responsibility or whatever but Joe and I, we used to think that we keep business and personal life separate. Completely separate. So we go to work, that’s work. Personal lives, that’s completely separate. And we’d have separate people in [them 00:29:50], we wouldn’t allow much crossover. And I think that’s just the way that we thought it needed to be done, and it was safer. We felt that was safer maybe.
Joe: Yeah, we definitely thought it was safer. And I definitely that it’s more fun the other way. Well, it generally can be more fun the other way. When you start to blur the lines a bit and let personal life and business take over. It makes it a little bit easier to be an entrepreneur as well. So, if you can do it, I think, and do it successfully letting that line blur will help you in your business.
Justin: So, I mean, now we don’t even think about it. It happens all the time. I mean you have an apprentice or a couple of guys living at your house. We’re going to be in Thailand or elsewhere and having people crash on the couch or guest bedrooms and that kind of thing, some of our teammates. So, yeah. I mean it’s way different than it was I’d say six years ago, Joe, when we were working in the corporate world. So, and we don’t even think about it today. Now, some of this comes down to your maturity, your experience. I don’t think I could have done it this way, like that blended, when I was younger so at 22 or 23. I’m not saying it’s an age thing but for me, my maturity level when I was 22, 23 I don’t think blending would have been, as much as we are, the best idea. I don’t know that that’s true but I feel like that would have been a little less of a good idea. So, I think it’s good to determine kind of where your boundaries lie in terms of mixing business and pleasure, and try to stick to that. But it’s worth exploring those boundaries. I guess that’s what I’m trying to say.
Joe: Yeah. I think that you have a good point there. I mean it’s not for everyone especially someone who’s probably new at this entrepreneurship. I think that may be something that they want to define more closely, their work life and their personal life. But as your entrepreneurial journey goes on, and as you mature as an entrepreneur, it may be something that blends. And that’s okay. That’s okay.
Justin: All right buddy enough about this episode. Let’s get into news and updates.
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Justin: First up, there’s been a very public de-indexing of the private blog networks by Google. Everybody’s talking about this man.
Justin: Yeah. You got Spence over at Niche Pursuits. You’ve got the No Hat Digital Guys. You’ve got John [Hayden 00:32:10] over at Authority Website Income. Everyone’s talking about how this has affected them. How this has affected their private blog networks, and it seems to vary. So, anything from a couple of hits here and there up to 50% – 60% of their network, so yeah. Some people were seriously hit. And it looks like, from what they’re saying, that they’re looking at fairly wide footprints. So, private blog networks, they had all the same of something. They’re easy to detect by an algorithm. Really though, this is nothing new. This is typical with Google, so they go through these cycles where when things start getting popular, I mean Spencer and Hayden had been talking about private blog networks pretty publicly. And so, when things start to get big and it starts to work too well, Google lays down the smack and that’s what they did this time.
Joe: Yeah. My heart goes to Spencer and Hayden. I mean it’s just so frustrating when something works for so long and has giving you really really good foundations to build your business on, and then it’s just taken out from underneath you. But things will move on. The Internet’s not going away. SEO’s not going away. Internet marketing’s not going away. It’s the sky is falling. We’ve checked our sites for sale, our sites have not been affected. Those that did use PBNs. And you know it’s something that we will discuss with depositor who wants to talk about sites that use that or sites that don’t. We’ll be very honest and up front with that in any of our listings.
Justin: Yeah. It’s interesting. So we actually have had sites that we removed because we saw a major change in rankings like over the last year. We’ve had a couple of those that we removed from the marketplace. And so, I mean we’re regularly checking this for sites anyway. And it we took a nice deep dive on our current listings, and we’re like something. I mean we know that we have some sites on there that have PBNs, like so one of them at least must have taken a hit but luckily it looks like they survive. You know, and looking around and reading some of the other bloggers, it seems that there are people with PBNs that are working fantastically still. They’re still cruising along. So, it doesn’t seem like all PBNs were hit but some of the ones that had some signatures or some footprints that might have been a little wider, it seems that they got demolished. But again, it’s one of those things where, you know, some of the other PBNs in the future, if it becomes a big deal and you’re using tactics that become very popular and effective, good luck.
Now a bit of good news. We closed our first investor deal for the alpha tests.
Joe: Just got off the phone last night with him. I was very very happy about that. Me and Mike closing the deal and getting [them 00:34:41] done, and you helping us with the pre-call questions. So, it was definitely a team effort, and I’m really really happy that we’re moving forward there.
Justin: I’m really excited about this. We haven’t released anything publicly because really this is more of an alpha test. We’re going to do this with three to four investors. But the basic idea of this is that someone purchases a website, we manage it, and we have a split amount. So, someone that’s looking for a completely passive investment. They don’t want anything to do with growing it out. They’re strictly looking at it from a numbers perspectives, then we manage and grow that investment for them. And the opportunity there is tremendous because I think we’re in a really early market. It’s funny. It’s all about perspective. When we talk to people that are used to — lets say buyers on Flippa. They go oh my God, your multiples are so much higher. I’m like yeah, well, they are because there’s a lot — I mean you can get a three x websites to buy on Flippa. Good luck with those. Good luck with those actually having the revenue because anyone can publish anything there. And then, on the other side of things, you have buyers that are used to dealing with like SaaS companies with brokers, and they’re going oh my God your multiples are so low. How do you sell for this cheaply?
So, it’s funny but on the invest side, so for investors, when they’re looking at — Let’s say the site does nothing, Joe, doesn’t go, doesn’t go down. Sits there for the first 12 months. And they purchase or they bought it at 20 x multiple. They get a 60% return. A 60% ROI on their money which is outrageous. Now, obviously this is pretty risky. I mean this is a riskier investment but those kinds of returns are unheard of in the investment industry. And I think it’s because our industry is just so new and so early eventually those margins are going to collapse to where it’s not nearly as high. Guys like us or other money guys are going to hop in and swallow up all that margin. In the meantime, we’re looking to take advantage of this growing industry and really expand it.
So, I love this investor program. I’m all about it right now. We’re going to continue to give you updates and kind of let you know how it’s going overall. We’re actually having our best month ever in September. We are over 200,000, I don’t know the exact but maybe over 230 now. So that’s fantastic. We’re really stoked about that. It’s great because August was our second best month ever, so we’re crushing it now which is great. I mean with the re-design, all the work that we’ve been doing over the last couple of months, it’s nice to get some pay off for that.
Our last bit of news buddy, we launch our upcoming events page. This is over at EmpireFlippers.com/upcoming-events. This is great. So, we’ve got a workshop coming up in Chiang Mai. We’re going to be meeting up with the drop ship lifestyle guys, Anton, Johnny, and their crew. We’re going to be in Bangkok doing a workshop. We got a ton of stuff going on. We’re going to Vegas. We’re going to Los Angeles. So, I’m really excited about this. If you’d like to meet up with us in any of these cities, like to attend a workshop or any other events that we’re going to, you can check it out on that page. You’ll see exactly where we’re going to be and we can hook it up.
Joe: Yeah. I’m very excited about all this traveling and meeting all these people. It’s going to be a lot fun.
Justin: All right, man, let’s get into our listener shouts also known as the indulgent ego boosting social proof segment. We’ve got a mention from Kendrick Kennison over at Twitter asks: Do you guys have a recommendation for a domain registrar. I have hosting settled. I just want to move away from GoDaddy for the registrar.
We still use GoDaddy because it’s just so widely used, so in our industry working with the things that everyone else is using tends to make more sense. I don’t know. Joe, you have any recommendations?
Joe: Yeah. As a secondary backup, I would probably use Namecheap. It’s definitely something you can save a little money. Domains are a little bit cheaper than GoDaddy. Their UI is pretty easy to use. And a lot of people have Namecheap accounts these days as well. So, it’s pretty easy to move from one account to another because that’s the real big problem is if you’re moving domains around, and you want to go cross registrars, then there’s a limitation on how many days. You have to wait 60 days with the same registrar, so a lot of times having a GoDaddy account or a Namecheap account allows you to change ownership without going to re-register.
Justin: We’ve got The Departure Board on Twitter asks: Hey guys, love what you do. What do you use to aggregate all the blogs or podcasts that you follow? Cheers.
So, I use Feedly which is great. So, it can help me — It basically just runs from the RSS feeds and I can follow all of them. I can categorize the different blogs and podcasts based on industry or based on interests or whatever. I mean that works for me. What do you use Joe if you want to follow like particular blogs or whatever? What do you do?
Joe: I use Stitcher for podcasts, and just put them into different channels, and that just makes it a lot easier for me. For blogs, honestly, I don’t follow very many so I get email updates usually from the blogs that I follow and that’s just about it.
Justin: You use Stitcher for podcasts. I use an Android app called Dog Catcher to listen to podcasts, so that’s really cool.
Joe: I started using stitcher because it synced to the desktop app, and this way I could stop listening to my phone and start listening on a desktop.
Justin: So fancy Joe. You’re so fancy with your Stitcher. All right, man, so we got a couple of mentions at Zendesk. Overall, dude, our feedback has been really positive recently. I’m really excited to see that because I know that in July and August we slipped up a bit in terms of how quickly we were getting back to people. We took a little longer on some of the depositors in some cases, like 24 hours to get back to them with information which really is just not acceptable. I mean people send over money, they have a request about a particular site, and we don’t get back to them. They just sent us this cash, so that’s not good. So, glad to see that we’re fixing that. Our response times are getting much better.
Thomas of Australia, was a depositor, said the service was first class and I will be pursuing more options. That’s great to hear Thomas. Appreciate it.
Kay reached out to us on Zendesk with regards to meeting up with us at the rhodium weekend event in Las Vegas. We chatted a few times, and she said I appreciate hear from people so quickly, kudos on your efforts to continuously improve. Thanks Kay. We are still working on that, and we are working on that, and we are getting better as we go along. So, appreciate it.
That’s it for episode 111 of the Empire Podcast. Thanks for sticking with us. We’ll be back next week with another show. You can find the show notes for this episode and more at EmpireFlippers.com/divide. Make sure to follow us on Twitter @EmpireFlippers. See you next week.
Joe: Bye bye everybody.
Announcer: You’ve been listening to the Empire Flippers Podcast with Justin and Joe. Be sure to hit up EmpireFlippers.com for more. That’s EmpireFlippers.com. Thanks for listening.