Die sicherste Wette im Business

0:00You can sit in on a group of entrepreneurs, listen to the discussion for 60 seconds, and know how much money they make within a rough a rough estimate. Or what level of the business that they're working if they're employees, like where they where they sit on the org chart, because of what level of conversation they're having. And so, at the highest level you're talking about allocation of resources. That's all it is. It's just capital and human allocation. Yeah. And you know, one level maybe below that would be human like human capital, which is how are we going to attract talent, how are we going to train talent, how are we going to get compounding returns on talent.

0:31Because you know, I I like the saying, but you're just one great hire away from all of the money that you want. Yeah. But the thing is is that I think the catch of that that ism is that you have to become the type of person that that person wants to work for. Totally. And that's that's the hard part. Yeah. That's like sure. Yeah, yeah, yeah, of course. What's his name? Tim Cook, right of Apple? He could He could probably grow your business. But he wouldn't work for you. Yeah, [laughter] yeah, yeah.

0:58>> And so like that has been always at the forefront of Leyland and I Smith, and that's part of what we do with the brand stuff, which is we want the brand to stand for things that because we're we're just as aggressively advertising at a tactical level we're more aggressively advertising from a transactions perspective for the talent we put in portfolio companies. So we place talent I mean, a few times a week. I mean, we have three, four leadership positions a week that we fill in our portfolio companies compared to how many deals we do at the portfolio level. And so and that's the that's the highest return on capital that we have is buy someone, and I say buy just in the capital term, buy talent for 200,000 a year, make 20 million a year. Yeah. No brainer.

1:42>> Great trade, right? And one of the big one of the big misdemeanors I think that one of the biggest mistake entrepreneurs make, myself included when I was earlier on, is that I didn't understand the difference between A and B talent. You can pay A talent 30% above market and get 10X the output. And there's no sense in ever paying below market in my opinion because you just don't get you can get so much more for the for the extra premium that you pay that it's one of the best it's like the best best bet in Vegas. You know what I mean? The best trade you can make is that premium to bring the the right person in that's 10 times more effective.

2:15You know, have you heard of the the Keith Rabois um he has this expression about barrels versus bullets. Mhm. So, the concept here this guy was um I think he was like a COO of of Square or Block, whatever you want to call it. He was high up at PayPal. But anyway, so what he said was like look, in an organization you need barrels. These are going to be the ones that you give them a problem or like something and they'll just solve it, right? And then the bullets like they will do what you tell them do, but you should always hire a barrel whenever you meet a barrel. And it's kind of what you're saying here.

2:45And to me like I I I love playing poker, right? Like I'm a gambler at heart. But in in like in business it's like unfair. It's like you make this hire it's like upside is unlimited. Well, I mean it's gotten to the point now where we will like we interview we basically have open interviews. Yeah. So, if we see someone who's incredibly talented, we will hire them without really having a clear position for them yet. And like I'm saying that's a bit that's if we have an incredibly talented person. Like we had someone recently um who was an exceptional sales director, had huge experience, was an ex-CEO, like all this great stuff, great value fit. Um and one of our portfolio companies we're about to uh you know, make the recommendation that you should take this person.

3:27Um and they were like, we don't we don't think we want to do it. Um and so we hopped on the phone and we're like, you're wrong. Um like we have a lot more context on this. You should do it. And it ended up somebody from like their outside that said, you shouldn't do it. And they had no that person had no context. And they were like, we actually wanted to hire him, but we didn't trust ourselves. Which by the way is huge part for entrepreneurs is like you make one bad hire and then you think, I can't hire people. Like you're going to make mistakes. It's part of the game. You get better and better at pattern recognition. And so, this person had talent, it was clear. And so, we were like, "Just so you know, we're hiring him no matter what." And so, we're either going to put him in your company or put him in somebody else's. And they were like, "Okay, yeah, yeah, no, no, we want him." And so, it's like, I think that's the level of talent is like, you should feel FOMO when you're talking to the person. And here's the other litmus test that I love. I got this from Leila.

4:12If you are not learning on the interview from the candidate about the thing that they're supposed to take over, you shouldn't hire them. Because it means that you know more than them, which means that you're required for them to be successful, which means that they need you, and you no longer you don't get leverage. Yeah. That dude, that's way better. So, I used to use this Larry Page proxy. Um so, he would just get bored on all these interviews, right? He's like, you know, one of the founders of Google. And then he would be like, "Yeah, so like, tell me about something you're passionate about." Okay, great. You're going to teach me for 7 minutes. So, he can learn something.

4:43>> Yeah. Leila's is even better. Yeah, yeah. >> Yeah. Cuz if you think about uh from a from a chunked up example, an organization grows if the not if the cumulative knowledge base of the company grows. And so, if you bring somebody in who you have the complete you have their entire complete knowledge set about whatever the subject matter is, then the organization doesn't grow. Just as simple as that. >> Yeah. And if you were the smartest person in your business, then it means that the business will be capped by your brain. Yeah. If you have four other people who have huge trench knowledge, then I see it as this like in my head I see it as this Christmas tree where like, if you have four like this, the peak goes way above cuz you have this wider wider top, so the peak is way way higher. Whereas, if you're the single brain at the top, the peak is the top of your head.

5:31>> Yeah. It's that's like how I visualize >> Very small Christmas tree. Yeah, very small Christmas tree. Exactly. Dude. >> No presents. >> That's that's good. Um so, actually we have a couple minutes left here, but the Leila conversation is going to be really focused on talent acquisition cuz that that is the game. So, um anyway >> at it. She's a savage. >> you speaking of savages, so so A, yes, both of you are savages, um in a good way, obviously. But, B, when you find this talent, right? Like, I tell people I I tell my staff, it's like, "Dude, you know, and if you have that feeling, that little gut feeling,

6:03>> Yeah. you pull the trigger. You don't wait You don't wait that long. Yeah, cuz the next person they interview with will hire them. Yeah, totally. So, you you'll do it on the spot sometimes. We don't do I mean, we don't we still follow our process, but we we do 24-hour turnarounds to move things forward. >> There you go. Yeah. But, usually your your turnarounds are like We try and do We try and do everything one day apart if we Like, we always try to do that. Like, we have really good metrics around HR. Like, our cost to fill is way below industry average. Our time to fill roles, um is like 22 days versus industry average is much higher. Um our two-sided fit at 90 days, uh which is one of our key metrics, is that the the person above the person and the person both say that it was a perfect match. Mhm. 90 days later.

6:40>> Two-sided fit. I like that. You guys came up with that one, too? Uh well, director of HR did. Oh, okay. Because she came from Audax, uh private equity firm, and so she was director of people there. And so, on the interview, she was teaching at She gave all these metrics that I didn't like time to fill. And I was like, "I should Why have I never tracked this?" Like, that's so smart. And she's like, "What's the cost to fill?" And here I am thinking I was like, "Oh, yeah, I'm this big metrics guy. I know the cost of our customer, CPM, CPA, all these things." And she's And she's like, "Oh, you don't know what your cost to fill was?" And I was like, "Wow, like such an idiot, myself." And so, that's why like that's why you need really smart people around you because like I learn from from her all the time.

7:17You should feel like an idiot when you're talking to high-caliber prospects. >> About their subject. >> Yeah. Real quick, if you're a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the $100 million scaling roadmap, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly, where they got stuck and how they got past it. And so, we broke it into these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so, I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information, and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page, you can just book a call with my team and we will look at the business, see if we can help, and if we can, we'll invite you out to Vegas and we'll do this in person live.