How Mehtab Adds 10% More Profit To The Brands I Invest In transcript

okay matab you think more operators should be cutting benefits cutting their employees benefits this is like a thing that people are not doing enough is this really where you going to start this conversation are you the cut benefits guy now yeah I mean it sounds horrible but I think it's um I I think there's a lot of win-win in it where employees sometimes I think most of the time they would just prefer cash and they put the savings with you uh is there a specific Pathway to cutting benefits that accomplishes that like where are people overpaying for benefits because if you say it as cutting benefits it sounds bad if you say it as um giving employees more cash it sounds pretty good like and how is that a savings split Etc yeah good question so maybe a great example we could walk through is one of our companies that's currently set up in Mexico we have about 120 people there on the manufacturing side um when we moved there we were told by the senior management team that you need to have a transport benefit which is where a bus picks up everyone and drops them off at work and that was running us I I want to stay close to $30,000 per month in in just that transport benefit so um I thought why don't just ask the team and see if they actually care about that so we ran a quick poll um as I literally just asked everyone there like hey would you rather have X amount more dollars on each paycheck or would you rather have this Transportation benefit and I want to say 95% of the people are opted for the cash in their pocket um now now this can kind of hurt yourself if you're looking at higher level roles where freeing up someone's time is really really important so they can think more about their work if that makes sense so if you had an employee that's $200,000 a year it's okay to give them more of these benefits but they're not thinking about specific things if that makes sense but if it's something like production work where they're very on and off um I think that's where this really makes a lot of sense that's where we found the biggest most consistent wins so you how much did you save per month by doing that uh I think we saved 15 20,000 is per month geez um and then people who wanted that benefit could just pay for it and they had they had enough money to do it yeah they just sorted out some other form of transportation yeah yeah it's a good it's a good illustration of like how some of these like it's almost like a market principle it's just like centralizing a benefit like that is not actually a very efficient way to give the benefit because some people care about it some people don't some people would rather do other things but then they have they're forced into this mechanism because it's the cost you know whereas if you just put the money in their pocket and let them make a rational decision like they'll probably be better and you'll also save money um yeah exactly sort of like a perfect perfect illustration of how a market in some ways is actually a better example of this that that's a really big savings too th I mean this is what I basically want to talk about for the next little while is just like you you uh and I both separately and uh one thing I one of the reasons I've hav you know I've had you on a few times uh at least twice before I love our conversation um one of the things that you and I have both talked about a lot is how lean Opex is a particular value in DTC um and I I have a couple thoughts about that um for how you know that plays itself out but I think almost nobody I've talked to who trumpets this value actually says it with the level of um Clarity to how to do it that you do you you you talk about managing people in a way that is both good for their production in the company as well as saves money for the uh brand with a level of clarity that I just don't know if I've ever heard anybody else do um maybe maybe just tell people really fast how many so you at card of Ventures how many brands do you guys currently have either a minority or majority position in you you guys ofc Brands Yeah we actually closed the deal two months right after we did the podcast with you because of you so thank you um and working out good and then uh we're just waiting on the signature for another deal today it's actually just waiting on someone's mom to sign off that's the last step uh which is kind of funny this kind of thing always happens it's not a big deal but it's just funny to hear about um yes there's about eight companies and I'd say of those were usually very active in anywhere from three: to five at a time right now that's closer to four so and in when you do this this is an area of the business that you guys so you guys take majority and minority positions as very active Partners helping um helping Brands just get more profitable as they grow um yeah you want to say a little more about like sort how you engage with companies I think it's pretty different than what other people do yeah so it really depends on the specific company in their situation we've done everything from be really passive if that's what they want to extremely Hands-On so for color my co-founder when we closed that deal because of your podcast my co-founder flew out there for a week and he worked with them hand hand inand on the opposite side and then he also met with them in China when they were working on reuling their supply chain so we can be really really Hands-On or hands off if that's what someone wants like we we have equity in a um in an utopic company that sell supplements and we're pretty hands off the last thing we helped with was just mapping out the plan for setting up a UK based production facility yeah um because that's he just asked us for help so we just jumped in and help execute that but it just varies by company so I think that's what makes us a good partner is our flexibility um so you know you have oh yeah Sor go well and you also I think have real value to add as an investor like you you understand DC extremely well like and so when you want to go in and get involved with the company and really help them sort things out I think is an unbelievable deal for an operator who who like has some good things about their business but just like needs some help thinking about the like mechanics of the business side because you you probably think with the most clarity about a lot of this stuff of anybody I mean when I've heard you talk about you know a debt stack for a brand for example like you've got absolute Clarity to what you're talking about in a way that just most people don't it's just over they didn't they got into the business because they wanted to do product and marketing not because they wanted to understand their debt stack and so somebody like you comes in is just like you know really really um clear about that in this area of the business Opex thing is I think another big deal I'm so convinced that Brands um are spending too much money on their operations and not getting enough value out of their operations I have a couple of things I like to think about with that you now are watching this happen across a bunch of different businesses that you are actively in and actively helping do things like you know this benefit kind of thing um y you know um so um so I wonder I wonder if we could just spend some time talking a little bit more about um really specifically how do you manage people well um and how do you do that in a way that is also shaves Opex Etc like maybe let's just start at the start like what is the first thing brands should be doing that they that they maybe aren't as much as they should be that is like the biggest lever here um on the people management side on the Opex side to sort of start optimizing yeah I think the number one most obvious thing is to have really good hygiene and implementing best practices around management so I think a lot of times we into a brand that was doing seven figures maybe they've jumped up to 10 20 million or something and there's still no formalized review process and the reason it's important isn't so it's like you know some super corporate formal thing it's more so so the employees feel it's really fair otherwise you'll end up with a lot of attrition um and on top and I think like a system like scaling up or EOS TR that's the easiest thing to do because it forces you to implement a lot of hygiene and best practices um an example of that would be the gwc are are you familiar with EOS at all I'm familiar with EOS uh well I'm familiar with both basically I've spent more time in EOS meetings but I've never implemented either precisely for the reason that you said which is that I'm not building a very big thing um and so um but I I just had a client start to implement EOS and I was thrilled about this if I could go back and do 4x400 over again one of the things I would have done much earlier is impl OS actually um because because like I've heard you frame it like this people just don't like they just don't have a real management system and a real operational system but it's a solved problem like people have thought really hard about how to do this well and you've mentioned scaling up in OS is two of them so so go back to what you're saying about EOS specifically yeah so there there's a handful of tools I really like the gwc is a great I think we've all been there where we have someone on our team and we don't realize that they're maybe not pulling their wait and then when you really think about it you let them go and you're like wow they're truly doing nothing right um that's something EOS kind of slaps you in the face with because they have tools like a scorecard which is just a set of kpis by person that's being looked at on a weekly basis and at the end of the day everyone's goal is to improve a specific number right and what EOS really forces you to do is ass sign out a set of numbers or even just a number to each person and they know that's something they're responsible for and they won't be surprised if they're told things aren't going well because they know that the number they they responsible for has atrophied over time so I I really like that and then the grading system they use the 555 review system um as part of it they have something called get it want it capacity to do it and even just thinking about those three things it's really nice because it simplifies it to the point where even an entry-level manager can apply that Downstream with a lot of clarity and again it Fosters a nice sense of fairness because no no one really quits because um you know they're well they do sometimes they feel they're not getting paid enough or something like that but really they tend to quit because they feel something's not fair right um so doing things like developing a really good compensation philosophy uh there's a book by ver Harish she developed scaling up called scaling compensation if you read that you can build a beautiful comp philosophy out in maybe 15 20 hours including the time to read the book and you'll have way Less HR issues like Pro probably 60 70% and it'll give you a lot of clarity around who's the right fit and who's not the fit um why don't people do this it's like when you say I could solve your HR issues your comp philosophy comp philosophy is another perfect example of something where like people are paying people for no reason um I you know Taylor's pointed out a lot of times that that like um one of the things he likes about agencies for example is that um is that like uh internal employees float around aimlessly and nobody really knows and so in that respect agencies are cost Savers like everybody sees the big price tag and they're like oh my gosh it's so expensive but actually like so much bad performance is hidden in organizations because these kind of things like so why don't people do it yeah I think um I can speak for myself so I actually was introduced to EOS when I was 22 or so through a COO that we had and he was a really bad coo so I just totally ignored it and left it alone for a while and I think I got back into it when I was 25 or so and I think a lot of people just feel it maybe when you read it through the first time you could feel like oh my company's not big enough for this or I don't see how this applies to me or oh we already do this but I think what's beautiful about it is it forces hygiene in all of the basic areas and that comes together to make you just way more healthy than you would be otherwise if you were missing even just one or two small pieces yeah um uh where where do people start with that they do they go to I just buy the book I just buy um if you just search up traction by Gino Wickman I would just buy the book it's like $10 or something we don't use an implementer we've always self-implemented I feel like they're kind of pricey for what they are they're 7500 a day 10,000 a day um but this didn't make sense to us so we've just been doing it ourselves for a long time now six years I guess um this is uh this is um do you think do you think in general do you think in general people have a correct sense of what like good or bad looks like like you mentioned using a scorecard you know um with the OS like but how how much of this do you think is just because people have a really I mean I guess I guess the question is like when you start implementing these things with a with a brand do they actually um are they surprised by the results of some of these things like like you know in terms of which metric they're tied to and some of that yeah I think a lot of the times people kind of wake up and they have a bit of an epiphany if that makes sense yeah like oh hey we hired this guy to do X and that number hasn't improved it's only gone down so it's like you know well you might as well get rid of them if the number is not really going the right way I don't think you stand to lose much yeah yeah or you can discover really really top performers and double down on them like we our preference is always to run a really tight team and overpay them pretty aggressively uh the reason for that is every time you introduce someone new on a team you create more lines of communication and it becomes just disgusting and really hard to I'm sure you've run into it right like you you go from like four people to 10 people and it it's not like just a little bit harder to manage it's like 10 times harder to manage because you look at all the new lines of communication you need and then you need layers and every time you introduce a layer becomes so much more complicated to run a business so so the takeaway there is is uh aggressively compensate really high quality people basically absolutely do yeah I mean yeah you think that's true for like agencies as well like in terms of like yeah yeah we've run into a few really really good agencies that I like a lot um I'm just trying to think of a few like uh who was it I can never remember his name I I know his agency's name sorry I know his name but I don't know his agency's name but anyway a crucial point in Utah we've used them for audits four five plus years now um where those kind of come in and slap us around a bit or um uh David David Herman I really like him on the paid side where we'll just pay him once in a while to come in and kind of kick us around a bit so I think agencies can add a lot of value even if you are largely using internal teams like most of our brands are the sides where internal makes sense but I think having someone at an agency um kind of come in and you get a good feel for it if you talk to three or four agencies right you get a feel for who knows what they're talking about what who doesn't what good looks like what good does not look like Etc and um from there can can help you build expectations for your internal team or even just paying them periodically to do an audit once a quarter and it'll tell you if you know someone's doing a great job or not a great job look I just made the case for it and I really mean it more Staffing connects in some way to basically everything I am doing in business I could not be where I am right now without them I deeply grateful for them if you want to explore finding incredible Talent at like manager and up levels in the Philippines uh you should do it with my friends at Mor Staffing Mor staffing.com High integy trustworthy people who are going to make your business better and put more money uh on the bottom line of your business while they do more Staffing ./ to get started hiring incredible talent in the Philippines with more Staffing today so you were going to say something else about about sort of the philosophy around paying high Achievers really really well um so but I cut you off what what was uh what how do you you know aggressively compensate those people you said it it reduces lines of communication is there is there more to that philosophy yeah I think um and again I'm sure you've seen this especially as you've been in an agency business where it is a people business it's not uncommon to find one person who really creates the value of four which sounds absurd um you see it a lot with devs I think like 10x Dev is completely a real thing you see it a lot with sales guys where it's not uncommon to see one sales gu out sell other people by a ratio of five or 10 to one and I think those people should be extremely aggressively compensated and I think like you just stand to lose so much if they leave and they add so much value to your business it's and keep in mind even if you could just hire 10 people to match their output you're still stuck than managing 10 people instead of one right so that's why we believe yeah yeah exactly um like we have one guy on our team at the floral company named Campbell who I just like really really love he's great example um total Beast uh if you need something done he just instantly great strategic mind as well and he's someone who's been on the team I think for three or four years maybe longer now but um I love him and like it's great having people like that that you're really excited to work with and personally that's what gets Alex and I really excited my co-founder is when we get to work with really smart people that are that are just there fully dialed in they really care um it gets us excited so we don't we don't mind kind of comping aggressively I think this is a mistake people make especially in the lean Opex conversation like lean Opex can sound like a way of saying be cheap and it's not really that I think um I think there's um there's you know I mean the example I've used for this and and um I think this came from Taylor initially but is like and this is I think in general with the agency versus in conversation this comes up it comes up in a few different places but the the example I've thought of is like the I'm a big baseball fan the Los Angeles Dodgers in the last year agreed to a contract with SH Otani for $700 million uh you know um and they are and and that happened before last year and they are now considering paying Juan stto one of the other best players in baseball um they're like apparently actively pursuing him probably $600 million over a very long contract um and people look at that and go like how can a team afford that much and what what the data said was that um basically otani's presence on the team made it so that they like not only won the World Series but they smashed all of their financial forecast for the year that like even their forecast with Otani um you know who's the most marketable star in the world in baseball um you know did that and so and now they're like okay well actually made we made so much more money on him than we thought that we could actually consider also adding another player like this and if you're not a baseball fan it doesn't matter the same principal I think actually does play in which is that like chotani is is maybe the best baseball play player of all time in one way of looking at it like and so you know that's a super extreme example um but it's I think part of the point is it's extremely hard to pay that person too much money um and somebody else there's so much demand for their services that that somebody else is going to pay them a huge amount of money and so you cannot try to nickel and diamond or just see it as a cost you have to see it as a Value Center and you get and they ra the floor they raised the floor for your whole organization right yes right even if even if they're not in a related department when say your coo meets your CMO and he's like who the CMO is brilliant it just gets him really excited and raises the floor so yeah yeah totally yeah and I think I think people make this mistake a lot they just see they just see the cost they just see the amount going out on the check and it's it's a real problem um what about doing that internationally uh like how we you know you and I have both talked about International more Staffing as one of my sponsors for this episode my staffing agency in the Philippines I'm going to the Philippines in January I'm going hang out with them they're involved in every part of my business I am all I think about with them all the time is how much more I should be using them in ways and how a lot of jollies uh well actually I live in LA and there's a couple Jolly bees around so I've been to Jollibee before but we'll see one like three three blocks from me here so yeah yeah yeah we'll see I um it's it's probably not my favorite place to eat so but I probably will eat there while I'm there um but one of the one of the things I always say about more Staffing is and and and this is partly their way of viewing the world too is they specifically are not like a gind virtual assistance company they're like a they're like a gind superstars in fact the CEO of more Staffing is a superstar she's this kind of person she's been on my podcast a few times laa gavar she's she's she's a monster of a of a of a business person and everybody I've met at their higher levels in their executive roles are like this and of course why wouldn't there be there's 180 M 180 million people in the Philippines um smart people attract smart people and especially if you can pay at the top of the market there you're going to attract um the best quality talent and so it seems to me there's like a double Arbitrage opportunity here where you can basically implement the principle that we just talked about which is like pay smart people a lot of money keep your team lean in terms of the total number and then you can actually sort of double down on that internationally by finding those people in international places in inter in different countries um where you can actually go up Market there even more aggressively because your dollar goes farther basically um and then at the same time it's still you know meaningfully less expensive than hiring that same people same person in the US and sort of the two strategies can really come together I I honest to goodness do not understand why people do not aggressively do this if they're already remote USB company I get it at all um it it's it's just right there um so I don't know I mean how do you think about the role of offshoring um in your businesses um you know do you go do this really aggressively with Brands you go do you go wipe out a bunch of us-based inhouse people and go replace them with offo people like how aggressive are you about this yeah we've done it quite a bit um I'd say the only time it maybe doesn't make sense it's for very very high leverage roles where it doesn't really matter if I pay the person 30 grand a year or 300 Grand a year because they're going to create so much impact their actual compensation relative to that is low so someone like I don't know really good marketer right you'll kind of pay it doesn't really matter where they are you'll just just pay whatever the ask is um but for other roles that are more commoditized or like backend roles for like a lot of our supply chain team for example for one our companies is based out of India and South America um I like South America so because of the overlap the time zones but yeah we've had a good experience the Philippines India Etc um just depends on the specific company this one actually builds product in India and we have like a 60% operation in India so that's why we have our supply chain team there it just makes sense but to your point I don't really see the point of having people us-based and remote unless it's an extremely high Le leverage position where that comp doesn't really matter too much yeah yeah um you've talked about this before but like even Canada right is like 20 to how much percent cheaper than the US yeah I think our dollar is 30% cheaper right now and then on top of that there's just not as many jobs here like um we actually have one of the worst ratios of housing prices to income in the world uh and it's like that's kind of partially why so if you want good talent that is essentially Americans I mean culturally it's the same thing more or less just I say bag like bag um which you guys will make fun of but other than that there's uh there's not too much and it's 30% less so were you trying to say bag is that the word you're yeah yeah I just my wife makes fun of me because she's American so I just had to bring it up and because she's your wife so yeah right yeah that's amazing um yeah that's awesome do you um yeah I mean I think the time zone thing is helpful that's one of the harder things about the Philippines for sure um but I mean increasingly too most places there's like English speaking is really good like you know I know in the Philippines like every kid grows up speaking English basically from a very young age like yeah and um one thing I've liked about the Philippines specifically actually is on is supply chain as well you mentioned India probably has a similar value but um like manila's like an hour and a half flight from like you knowe manufacturing cities in China and so um I've been working uh this is like a newer thing but I've been working with that team on some supply chain stuff and they're just like jump they went to Canton fair and they did it all and it was easy for them you know and they and they do it so much they know they're around the places now and have more relationships and so some of those things so um that that I think is is a side of the business in particular where it makes all the sense in the world to do that usually you also don't need to be for supply chain stuff usually there's some you don't need to be communicating instantly so like if there's difference in time zones it's not a really big deal like somebody can send a slack and look at it the next day and it's fine you know if they're if you're not having people work greatever the Philippines is actually really good for finance roles because they were on us Gap until 2007 so um if you want to hire someone in finance with familiarity with the US capap side I I would look there first and I'd look for someone just a little bit older because they will have been trained in that so yeah that's interesting too because um you mentioned this as a general place that people don't think about which is like bookkeeping accounting uh like companies that are too small for a CFO um but like but they need some help like you think Philippines is a good place to look specifically for that oh yeah we've had really good experiences with the Philippines we actually have someone on our team she's been with us since 2018 or 19 and she does um she kind of keeps the books up to date but then she also runs a lot of bi projects so if there's something disgusting involving 37 Excel sheets and you have to be 300 IQ and doing more than just like V open pivot tables I give it to her and she's super stoked and like crushes it uh and she's great to work with so we we have a few we try to hire we basically try to hire that kind of role at each company I'd say it's a good fit for anyone doing it depends if you're Manufacturing in house or not because that creates a lot of complexity on the financial side and depends on how what your supply chain looks like Etc but anywhere from like 8 to 15 million a year I'd probably hire that rule and I'd do it offshore and I would have them split their time between bookkeeping um getting you really really good reporting uh on the financial side and making sure it is you know like a lot of people don't run on a cruel which is like all right well what's the point of having books then uh so like just making sure you have everything properly set up a good 13 week cash flow model um and then someone who can just tackle the really chunky bi projects that are sitting around uh it just saves so much time so yeah yeah um okay so attract that Talent so we've talked about we've talked about how you think about different layers of talent generally go for high-end Talent um where there's they can do the job of five to 10 people in massively influential roles pay them what they're worth eliminate run leaner eliminate sort of mid-level talent uh in the midst of that yeah um okay and then uh and then evaluate people with a true actual management process like EOS uh or scaling up right one of those things this uh this makes a lot of sense um okay what about what about hiring those people how do you how do you find good people because uh this is an area where like I suck like just like uh how do you evaluate good talent and how do you actually think about a hiring mechanism that makes sense yeah so we have spent way too much time on this uh it's probably it's a thing I've I've been most grindy with for all of our portfolio companies I'm the monkey that handles the building out like the hiring systems and like legal work and then the credit side too usually those are my three oh and and revenue in general but uh so for this we have a preferred text tack I'm not saying it's the best but our favorite thing to do is kind of hack um you're familiar with LinkedIn right and how you have to usually pay for a post so we use Jazz HR you can use any other ATS usually L A partnership with LinkedIn where you can post unlimited ads for free and then get unlmited applicants for free so if you do that Chaz HR is like $100 or $300 a month or something like that and it also the software is really good just for screening um and it'll let you post across multiple places so what we'll do typically is we'll create a role let's say I'm hiring a media buyer right I'll post a role for a senior media buyer a junior media buyer and then um I might also post a role with like a just a similar name like digital marketing manager or something and that way you kind of you get more ads up and more se you can think of it as SEO almost right when people are searching and they might not feel comfortable applying for a senior role but they actually kind of do have a senior skill set or you might find someone Junior who's like just totally exceptional so that's why we we open it up across seniority levels and just let's you 10x amount applicants you get using something like Jaz HR you can post on indeed at the same time um LinkedIn pretty much all all the boards you can think of and that that's been really really huge for us in general um it's also way faster to evaluate the talent because you can set up automated quiz so on we just have basic ones like you know how much were you spending across which channels before what kind of reporting did you have set up what kind of software we're using you know if you if you give a really amateur answer about reporting it's pretty easy to tell like that person can be skipped out on right um yeah you're getting how many you're getting how many applicants you said in some of these jobs yeah like for for mediab one since we just ran a process for this one usually anywhere from 300 to 500 applicants in the first week is kind of a good Target I think and okay that sounds so you you you kind of glossed over this though so you you said you also use a quiz to evaluate these people um just a basic skills test nothing nothing crazy it would literally take someone like you 45 seconds with that basic skills test how do you though sort through the answers like are these these are not open-ended questions some of them are open-ended and we just have a person on our team who goes through um she's based on offshore and she literally just goes through everything we tell her what we're looking for we're not looking for what's good what's bad and she has a pretty good feel for it now so it's relative she reads 400 media buyer applications yeah i' say of those like 300 might be Auto rejected because they put in like there are some questions that are called I what they're called in JZ HR but on indeed they're called um deal breaker questions and those will automatically reject if that makes sense so it's really just going through 300 and then we make sure the questions I should have mentioned this but we make sure the questions that are really important to us are further up top so she's not scroll through the whole thing and reading and then being like Oh oops she she'll read through like maybe the first question and can get to a no really fast that's smart if you found this content helpful for growing your business I promise you you will find most of my content helpful for growing your business which means you should subscribe that's that's really smart thinking about how the back end of that process is going to work when you set up the questions so that you can save some time because that could actually be a huge time difference um do yout do you um you've also mentioned I've seen you say this in a few places that just generally people just don't have a method for evaluating talent and their hiring in general right like they they're sort of making up how they hire people like how should people think about that instead yeah we use the process have you ever read who by Brad smart no um so it's it's a it's a really poorly written book with probably 60 70% I was just talking to the um you know the Epic gardening guy Kevin yeah yeah I was just talking to him about it about who because we had both read it and it was like that book is probably a 60% filler just to make I don't whatever the publisher wanted work but it's really good um I know Roman really loves that book as well from uh Peak 21 yeah um and that that is literally the hiring process that we use it it spells out in detail but it's basically a set of interviews and it teaches you how to conduct them and really the big thing is going after specific references and telling the applicant which references you want so I wouldn't say give me three references I would look at the resume and I'd say I want to talk to this manager that manager and that manager and if they can't get you references there that's a bit of a deal breaker because it's it is really a bad sign most of the time right um there's rarely a good excuse for it that's extremely smart uh I've always wondered about this with references that it just seems so dumb the whole idea of you provide the references is such a strange idea like um because yeah yeah we've had some shocking results this way like we had um we had someone interviewing for a senior operations role uh they're probably making like 180 to 220 is base and one of the references that we spoke to literally told us the person was an alcoholic and didn't show up to work on time at all and I was like wow I didn't expect that so the person was not what uh they were an alcoholic and they weren't strong enough to work like on time they had major issues ETC and then another person ended up confirming it so we had asked specifically for those references but I'm glad we did because it the reference check thing really does work if you're the one asking for the specific roles like that way you can't share your pick yeah that's um that's a that's a that seems like if you literally just did that from this episode that would probably really help you when you hire right like that makes sense and that book has a really good detailed process for doing it again it's just kind of a really horrible read way too fat a book but yeah it works yeah yeah um one of the things I I hear from you a lot is like there's a lot of these things that I think of as problems like I said solve problems like something that somebody else has already thought hard about and what I think what what companies end up doing a lot of times they're basically making up all of these things they're just like wait a minute why don't we create a you know we got to start hiring people so I guess I'll I know how this works like uh I write a job description and then uh and then I have conversation with them and I read answer you know and they're making every single stage of that up they're just like just like sure we'll try that and as if this process hasn't been thought about hard by somebody somewhere you know in in the past so you're referencing books like this all the time where it's just like just get this book read it go do what they say and you'll save yourself a lot of problems you know totally and there's probably only really like five books you need to read and you kind of get 80 90% of the coverage that you need uh can you name them uh yeah sure so traction uh EOS by Gina Wickman and then Vern Harish he has scaling up obviously which is great I think it's a bit scaling up I think makes more sense if you're a brand with a high amount of Revenue per head it's more complex it's harder to implement but it is very deep and very good and there's lots of great tools I would read both no matter what I love both they're also both books where you reread them I've read each one at least 10 times I always learned something new it's really cool um and then I like uh scaling compensation by Vern Harnish as well that one's the compensation philosophy one um and then the other two this book on supply chain or like I can't remember what it's called though it's like some really weird book I'll have to send it to you but yeah okay um the other two are where' it go hang on you mentioned who yes who who who that's what I was thinking of who's the other really good one and then it depends if you're running operations in house or not but um there's a classic book written by I think Eli Gat hang on one second Eli Gat yes the goal um by Eli Gold rat I don't actually super love the book because I think it's kind of basically it's about implementing lean if you're familiar with that like a a philosophy behind manufacturing and just improving processes but it's written in a storybook type format where the guy's wife is going to divorce them unless he improves through put it a at a at a production facilities I just it's kind of funny it's like overly Bose I'd rather have a textbook layout but all of our Ops guys love that book and it is does have good general knowledge so that's great yeah um oh there's also uh sorry ready fire aim that's the other really good one by Michael masteron have you read that no um I so I'm just like not a business book reader and I probably need to be but again as we talk about this we're talking about all the reasons why I'm not building a large agency because there's like a whole area of this where I'm like it requires like what I understand is true is that there's a kind of careful thinking about about this kind of thing that is that is required to do it well and I'm just I'm like maybe someday I will maybe it's because I have small kids my brain is elsewhere at the moment the clock hits five like but I I just I haven't done that but when I talk to you it um it reminds me every time that like there's a pathway to doing this if and when that day comes and it's it's laid out and and the the lesson in part to me is like take it really seriously take the operational side of the business really really seriously um because I've definitely seen this a lot where operators just like they just don't they just don't have that mentality about their business and they they're not um and that that can be fine uh like they're not trying to build that big of a thing like and or sometimes they have really good pmf that kind of covers up the lack of operating totally which which we've seen a ton too I'm sure you've seen it right where a brand goes from zero to 50 million a year but they're doing everything imaginable totally Incorrect and they think they're good managers but yeah like being a good manager I don't want to say it's unrelated to the end result of the company but pmf can just carry you really far and hire a lot of sloppy a lot of sloppy things like I know a band a brand that was bootstrapped to 30 40 million at like 20 25% evida in three years or something absurdly short and um everything you can think of is being done incorrectly on the marketing side right like they're bidding heavily on brand phrases when you go to the homepage it's like not merchandise at all it's crazy it works but it's just pure pmf which is cool on the product side but it could just be a better company right so so why not do it and and and that's exactly it is like you just why not like go and do the things that you need to do at that stage you know um or you know hire an operations lead who will start to like come clean things up you know even if you're not the person to do it I think that's part of the thing is sometimes the person who like develops the company that you just described is just like the wrong person to actually go Implement all this stuff and they just need to see you know um um and you know no it's hard to find that person if you don't know how to hire and all that stuff but um but yeah um yeah okay um what what Vol like percentage wise how much bottom line have you added to company by doing these kinds of things because you're talking about cutting under performers um offshoring changing benefit structures significantly um I'm sure part of the thing you've seen is companies grow better and faster because everything works smoother um but I'm also just curious from a savings perspective like how much have you seen like the impact be or I guess really actually make it measurable however you want to like what what have been the sort of really measurable results from implementing the kinds of things you've talked about this episode yeah I think the easiest thing to think of is um if we're looking at people purely like your cost of Labor is a percentage of Revenue so that's been anywhere from kind of 4% of Revenue all the way up to like 10% of Revenue depending on how bloated the company is Right sometimes you see a company gear up for a big increase in Revenue the revenue increase doesn't come now they're super flooded right um so in that case it's definely chunkier like that that's been even higher in the past so um yeah you've saved you're saying four to 10% of Revenue labor costs which is huge right like it takes a pretty mediocre company to being a good company let's say they're Meandering at like 3% like 3% EB or something you can hopefully get them to closer to like 12 15 yeah yeah um so and and like you said I think the actual main benefit is just a leaner faster organization where everyone's happier to work that's the really big thing like if you're not having fun day-to-day or excited to work with your team I think there's a problem like obviously every business goes through a down cycle where it's not fun to work there just because like I don't know maybe something happen a competitor launch a product just crushed you but you should look forward to working with your team and you should be excited to work with them I think that's the biggest thing for for Founders specifically it's really good um matab um you are an incredible follow on X uh you you give away a lot of knowledge for free all the time um people uh people should do that now uh they should go if they're if they found this on X and they didn't follow you I'm amazed but if they um if they don't they should go follow you there um at matab card that the link for that is in the show notes um but the number one place you you would say people should reach out to you if they want you to come and help with their company which I'd recommend honestly for any company that um that is look is open to any kind of outside help like this that you would like if it was my company I'm I'm not blowing smoke you would be my first call um and so um so uh so go to card adventures.com the link for that is in the show notes as well um tell people a little bit more about what to expect and and maybe what kind of conversation they can start with you if they go to centers.com and reach out yeah so we're we're super super flexible which I think is the number one people work with us is that flexibility and then operational value ad so preferably you have a few big projects you've been thinking of tackling and we can help you execute those projects with less less of a Miss I think the math in your head that you should do is you could raise a $5 million VC round and end up on the VC treadmill um but of that 5 million how much will you cost effectively deploy like you might only cost effectively deploy or sorry effectively deploy 10 to 20% of that so let's say you deploy like um let's let's even be really generous here and say you deploy like 1 million or two million of that five million effectively you've still incurred more net delution that if you had raised less money from us and we help you execute those projects plus you're not on the treadmill and you will in all likelihood net far more personally like our number one the first thing we do is we speak to a Founder we ask them what's your actual goal what are we optimizing for and then we throw a few structures their way that would work for that goal awesome um yeah definitely go follow up with matab to go do that um thanks matab appreciate it thank you always fun all right do follow up with matab if you want to make your business better one of the brightest Minds in e-commerce go to card adventures.com reach out to him he's really awesome uh great dude go check it out uh and of course if you want to follow up with me you can do that andrewj Ferris on X you can email me at podcast ajg.com or just go to AJF growth.com check out everything I'm doing there all kinds of good stuff there and don't forget to subscribe you watched or listened to this I promise you if you like this content you will like a lot of my content it is all very much in this range of stuff helping make your business better more profitable grow all those things um and do follow up also with my friends at more Staffing by going to Mor staffing.com virtual assistance can be helpful virtual professionals can change your business you heard me make the case for it in this episode you should go follow with them thanks so much I will see you next time [Music]