CEO Lessons: Bulls**t Mission Statements, Firing People & Saying ‘NO'

0:00When Moyes was selling native deodorant, he didn't own the trademark. and it was an issue he's got the deal done and they're like wait you don't have the trademark he's like yeah but there's no other native deodorant they're like okay junior what are you talking about that's not how this works um you know i feel like i can rule the world i know i could be what i want to i put my all in it like no days all right today we thought it'd be fun to do a episode all about how we actually run our companies so we've been running companies for like, I don't know, 10, 15 years now. And like many people out there at the beginning, we did a bunch of dumb stuff.

0:36And so we're going to admit and confess to some of the dumbest things that we did running our companies. And then talk about what we do now. That's actually like, we found that works. So the stuff that didn't work and the stuff that works, and this is around, you know, everything from like, you know, mission statements, how we used to think that these were like super important and how we treated them versus what we do now or branding and naming our companies or goal setting. These are kind of like the shortcuts that we use now. So what actually that we found works through the painful process of making embarrassing mistakes.

1:09That's what I think we're going to do today. Yeah, we got about like five or eight categories of like on hiring, on creating comp plans, on having boundaries with staff. These actually sound like boring when we're like just when I'm just reading that off. But I promise you, it's actually we have like interesting stories behind each one and stuff we wish we would have done earlier that I deeply regret that I didn't do now or that I didn't do then. But yeah, we'll go through all the stuff that we actually use on a day-to-day basis to run our companies. The touchy-feely stuff that's actually really important.

1:39So I thought it'd be fun for us to share shit we do when we run our companies. What are our almost like management hacks or shortcuts or like the methods that we use, which as a disclaimer, probably not the best. Probably not what they teach you at Harvard Business School or what, you know, like very polished, you know, seasoned executives would do. I remember when I started one of my early companies, it was my internal mission statement was to hire 10 ,000 people. And I then I hired like two people and I was like, shit, does anybody got an eraser? Yeah, yeah. Like, how do I make this 10? It was horrible.

2:20And then it was like, and then the mission statement for the employees is like, look, like we're going to change whatever. Like right now, the word is democratized. We're democratizing the financial markets or whatever. It's like, whatever that equivalent is, is what I said. Like, we're going to change the world one newsletter at a time. And so my mission statement. Did you really say that? No, but it was probably like as lame. I don't know. That would be the worst if I said that. But no, they're pretty lame. Now they're way more. So here's what I tell people. I go, here's the mission for the business.

2:52This first one, it's very selfish, which is I want to work on cool shit with cool people and have a dope life. That's just what I tell people. I go, so it's very selfish. I just want to work with cool people on interesting things. And that's more so the mission than anything. And then it's like, and if we are able to do this, this and this, that will also be cool versus a far more grand thing. My mission statements aren't nearly as grand. Are yours? I am in the exact same bucket. So definitely used to be like changing the status quo, you know, on my Steve Jobs shit. And, you know, because that's who you looked up to, looked up to Steve Jobs, looked up to Elon Musk.

3:27And he's like, you know, create an interplanetary species. It's like, oh, OK, cool. What's my version of that? Like, you know, I'm not trying to get to Mars and like make humankind, you know, interplanetary. But I was trying to do that. Do you remember that story of Steve Jobs? where he's trying to recruit the guy from Pepsi and Steve Jobs is like, you're just going to sell sugar water for the rest of your life? Right. Fuck you, Steve. What a dick, right? Now we're like, Logan Paul, genius, puts sugar in water, sells it to children. Dude, the audacity. So I'm like you now. Here's the notes I wrote on my answer for this, on my little cheat sheet I wrote.

4:09I don't kid myself anymore. I'm honest. I'm building a lifestyle business for me and my team. Almost exactly what you just said, which is I want to do dope shit with cool people, right? So do cool shit with cool people and in a way that leads to an awesome lifestyle. Meaning I'm not trying to kill myself currently running the business. And I'm trying to have a financial outcome for me and my team that lets us all elevate our lifestyles, right? Like that's, that is the, this business is a vehicle to have an enjoyable lifestyle, which is really funny. Because in Silicon Valley, lifestyle business is the it's the equivalent of saying no offense to start a sentence.

4:48It's like lifestyle business is how VCs pat you on the head and say, that's cute. Oh, oh, what million of revenue? That's cute. You know, you know, we don't invest in lifestyle businesses, right? If this is just a lifestyle business for you, we're not interested, right? You're you're a low ambition, which in Silicon Valley is where I live, is low status. However, for me, I feel like I broke out of the matrix and I was like, wait, what the fuck are all these people talking about? The point of life is to have a great lifestyle. I don't want to do something else with my life. I'm not trying to have a bad life.

5:19I'm trying to have a good life. For me, for my family, for my team, we all want the good life. Okay, let's do a project that's fun and interesting with fun and interesting people in a way that we all get rich. Is that so much to ask? That is now the blanket mission statement on all of my projects. And I don't know if that's inspiring to the troops, But it's inspiring to me. And I hope that it just attracts people who are down with that and not looking for the rah-rah, you know, save the world. I actually think that is a bit inspiring, to be honest, to like the right type of person. And at least when I talk to people, it seems like, yeah, that sounds wonderful.

5:58Another thing that changed with me is when I start new companies, I pick business models where I can afford to pay hires a lot of money. because I remember when I was starting a lot of my stuff, I'm like, man, I don't have enough money to pay a high quality person a lot of money. It's a trap. Yeah, I'm like, I wish I could afford to pay someone three or$200 ,000 a year so I could recruit a certain type of person so I could spend time with them. And so that has changed as well. Well, like what's an example? So like the hustle, traditionally, media companies, when they start, obviously they don't make a ton of revenue, you're putting out free content.

6:36and writers are typically not that well paid. However, like, so would that count as it was more in the, towards the bad end of the spectrum or was it on the good end? Because you did hire people like Steph Smith and Trung. I hired great people eventually. Yeah. I hired great people eventually, but like, for example, a good media, like you could run your media company a few different ways. You could, particularly for sellers, for ad sales people, you could pay them 60 grand a year and say they have a quota of only$400 ,000 and they make$105 ,000 when they hit their on-target earnings. Or you could go hire someone who you're going to pay$200 ,000 base plus a higher commission.

7:16And their expectation is that they're going to sell $2 ,000 or$3 ,000 ,000 worth of stuff. And typically, those people who are more competent and capable, I find are more enjoyable to be around. And so things like that, where I'm building a business that hires less people who I pay more, because that setup I think is more enjoyable. So I had the same problem. because my first business was in the restaurant industry. And the restaurant industry is basically like, you know, what is the worst type of business you could select? I think it's probably, I don't know if it's the worst, but it's down there.

7:45It's hanging out with the worst, whatever it is, right? So I'm just saying business model, right? Business model is almost all of them fail. Even when they succeed, they have like 10 % net margins typically. And you got to open up like multiple locations to ever make it big or have enough cashflow from a business like that to hire high quality, like, you know, highly seasoned people. And so I remember meeting the guy who ran Chipotle. I think he was a CEO or CEO of Chipotle at the time. And we were trying to create the Chipotle of sushi. And I was like, all right, you know, like give me your advice.

8:16I didn't even know what question to ask, but I was like, give me your advice. And he's like, well, think of it this way. Your entire product is in the hands of somebody who makes$9 an hour and doesn't want to be there. And everything you're telling me right now about how great the user experience is going to be. That's true for restaurant one. It might be true for restaurants two and three. By restaurant four, it's no longer true because you're not there anymore to do all those amazing things and give that amazing user experience. He goes, the trick in this business is whoever can figure out how to get minimum wage employees to give somebody a good experience, you get to win.

8:54That's the winning condition. He goes, so, you know, for like Chipotle, we ended up doing a bunch of things to try to improve that. He's like, you know, I don't know if we did it fully, but like they did a couple of things. Like, for example, if anybody, if you're a manager at Chipotle and anyone you manage becomes a manager of a restaurant, you get$10 ,000, whether you work at that company or not. Just like ever. It's like you had a hand in leading that person to be. I don't know if they still do this, but at the time they did. They also changed the title. So like their manager was called like restaurateur or something like that.

9:25And they paid them above market. And they're like, you know, we're doing all these things to try to fix it. Starbucks did the same thing, giving people benefits so that they stick around and actually stick with the job versus really high churn. But nobody's really figured that out. Point is, I remember it just wasn't a lot of fun to be in that business because I couldn't relate, you know, all the things I love. I'm an entrepreneur. I'm thinking about ideas or, you know, raising capital. I got big goals, big dreams. And I'm coming into work every day with somebody whose goal and dream is to get off work early.

9:53That is the like, that would be the best thing that could happen to them at work that day and i was like shit that's not that inspiring every day to like kind of and i don't mean that to knock anybody it's just the truth it's like you you're gonna hang around certain people when you run a business ideally you would be around people who are very very like-minded to you in the sense of they share similar values and goals and aspirations and then it becomes contagious and then they're sharing learnings with you and like i remember we interviewed i remember we were interviewing people for like this position because we kept having people flake out they would just leave or they would steal or stuff like that and like my buddy who was interviewing he goes well i like this person um they had all their teeth i was like what and he's like i don't know i was like i'm just looking for symbols i just he's like last three people stole from us and that sucked i just want somebody's not gonna steal from us like that's my new bar first and like after that i could figure out a higher higher level requirements and so did you see on um did you see on the tv show bear where they hire this you know this guy and on the first day they catch him outside smoking crack and they're like i think i need to fire you but i should go but i should go ask and he's like yes chef fire him yeah and by the way there's one lesson in there which is my dad told me something he goes look uh you're building a small business and he goes but look but think about it you're still spending like every waking moment thinking about how to make this thing successful he goes if you worked on a big business you don't have to spend double the hours you're still going to spend every waking moment trying to think of how to make it successful.

11:24A big business and a small business both take the same amount of time. Why would you choose a small business? And that to me was the right advice for me for who I was. That's not the right advice for everybody. But like, somebody out there needs to hear that right now, which is that like, this idea that a small thing is somehow easier or less painful is just not true. It is not true. And it feels nice to be able to, like, pay people a lot of money, or hire a certain type of person that makes your day to day far more enjoyable. Talk about the naming thing. My opinion has changed on that to align with yours.

11:57So one thing we have here is branding or naming at the beginning. So I've evolved my philosophy. So I used to try to get the whole thing right, right away. I was very precious about my idea, and I wanted it, my baby to be cute and be ready for its first day of school. And then I realized that nobody cares about my baby, and I have no customers, and nobody's paying attention. This thing could be called dog crap. You know, it doesn't matter until it matters. And so now here's the balance that I figured out for me. In most cases, I try to get the name right off the bat because changing the name is kind of annoying.

12:30You lose the brand recognition. And I tried to get the trademark because I made that mistake before of not owning my trademark and having to change my name a year or two in because I realized, oh, I'll never be able to sell this without owning the trademark. And so that was a big mistake. I don't know if that's true, dude. What do you I don't own. I sold the hustle without owning that trademark. You didn't own a trademark for the hustle as a media company. You didn't own anything because I know they have it now. We looked it up. They have it now. But what happens is if they look and they see that they can't get it because it's taken.

13:02Now you have a problem. Now you're either going to get negotiated down. Is that true? I see. I didn't even know that. Like when Moyes was selling native deodorant, he didn't own the trademark. And it was an issue. He's got the deal done. And they're like, wait, you don't have the trademark. He's like, yeah, but there's no other native deodorant. They're like, OK, Junior, what are you talking about? That's not how this works. You know, and so then he's like, OK, who he's like, I'll just go file for it. Like, nope, it's taken by some guy, some woman or some guy sitting in Palo Alto doing nothing, squatting on it.

13:34And he goes to that person. He's like, hey, I'd like the trademark. He tells the story on his episode of the pod, I think is like one of the first 10 episodes of this podcast. but the short version is he goes and he offers the person some like you know he's like hey can i have it and they're like no and he's like okay i'll buy it like you know two grand and they're like no and then they figured out that he's selling his company and then the price went like way up and i think he ended up having to buy it for like either like a quarter million dollars or like one or two million dollars he had to buy the trademark at the last minute that's so you know it's fine when you're he's selling the company for 100 million but like very painful process um You know, to do that.

14:11Better off just having it. You taught me something. I thought that they were nonsense. But I also used to think, I mean, look, my company was called The Hustle. That's a horrible name. One time I had this conference called ConCon, the content conference. Like I'm, my first, the first business that I started making money online, it was called Itch Juice, baby. Like I'm horrible with names. And, but now I do actually think they're way important. Before I was like, names are bullshit. It doesn't matter what you call it. someone's going to come. Now I'm like on board with naming and branding is very valuable.

14:44So I don't think a bad name kills you, but a good name lifts you. I completely agree. I think great design is a huge value add and costs almost nothing to have great design versus OK to bad design. It's not actually more money that it takes. It's taste. You just have to have the right people to do it. You can pay for that taste like you can pay a fancy agency because you know they have the taste, but you could also just have taste yourself or find somebody that's cheaper that has taste. My feeling on design is I don't start with fancy design. I start with like, you know, whatever simple design.

15:19And then I set a milestone almost as a reward, which is if we get to X, then I'm going to fancy pants my design because it's more for me than it is really for anybody else at that moment. Um, but you know, if you're, if you're a consumer package, good or something like that, then the packaging obviously super important. If you're a SAS tool for whatever your design, you know, doesn't matter as much. Before I launched Hampton, I paid an agency, I found an awesome agency overseas. So it was like, I think 15 or 20 grand. And we did a whole branding thing. And I'm like, I can't believe I'm doing this.

15:48And it was totally worth it. Did I send you that presentation? And I liked it. I was like, Oh, this is cool. And that's different. You wouldn't have you would have never done that before. I have I never would have done that. It was totally worth it. We both were very cheap with things before I was I wasn't cheap with spending money, but I was cheap with my time, meaning I placed no value on my time. And I think you were cheap with spending money, even though you had a bunch of cash in the bank. Not anymore. Then when I saw you spend 20k on your branding before, and I was like, Oh, that makes sense.

16:18He's got a killer name for his community Hampton. And then he's got like a really classy design that makes it feel elevated, which is my word of the year. Then I was like, Oh, yeah, what are the areas where I've been cheap. One of mine, for example, was in recruiting. So I used to take pride in just recruiting myself by hand hunting. And I would just be like, yeah, I'm going to go find people and I'm going to like message them and I'm going to cold email them and I'm going to convince them and I'm going to interview them and I'm going to. And now I hire recruiters and I'm like, oh, for which roles for every role, anything.

16:51If I need to hire first thing I do, I just text my recruiter, this guy, Carson. I'm like, yo, Carson, I need X. And he's like a great e-com recruiter and so i'm like carson i need a i need x and he's like on it and he's like super aggressive and so he's just like instantly will start sending me linkedins i'm like yes no yes no he does is he a full-time employee or he's got his own agency um he's his own recruit he's his own solo shop and so um so i use him to hire for these roles and it just saves a ton of time and then i'm able to and i have him sometimes i'll be like yo join this call so that you see what i ask so that when you're screening candidates, you just ask these questions before me, right?

17:28And I'm getting a way better result using recruiters. And yeah, you pay the commission when you hire the person, but like hiring a great person faster is totally worth it. So how do you, without blowing up this guy, Carson Spot, how do you pay him? Do you pay him a percentage? Same as all recruiters. You pay a percentage of their first year salary. And if they don't - And then do you pay him like six months later? I pay him, I think what I do with him is I pay him like 30 days after they join. But if they don't work out, like like we had one person didn't work out three months in. So if they don't make it three months, then he just reimburses or credits it back or whatever.

18:05And then do you do you do it for all like even an entry level position? Everything, anything I need, anything I need now. I'm like, whatever I would spend the time doing, this guy is going to spend all of his time doing. And so it just moves faster and he's better. And I'm like, why the fuck wasn't I using recruit? I used to, I used to take pride and I was like, what am I trying to save here? The like, you know, let's say you hire somebody for a hundred grand. Let's say the recruiter fee might be 15 or 20%. So you're going to pay 15, 20 grand. That's a lot of money. Yes. But I do it. My business is, if your business is working, then it makes total sense to be using recruiters to increase your pipeline and, and save time and get the, get good butts in seats faster versus trying to do it yourself.

18:48That's time. You're not focused on the business that takes longer. Yeah. The biggest thing that's changed with me with hiring is reference checks. So like, for example, I messaged someone two days ago. I go, hey, I'm thinking about hiring this one person. Do you think that they'd be decent at managing a small team? And it says, I don't think they could manage anyone, let alone themselves. That was the reply. And my reply to that was, all right, thanks. And I don't hire that person. No, your reply to that should be, thank you so much. what's your address i'm sending you something because most reference checks will not give you honesty when somebody goes out on a limb is actually like yeah let me save you some pain here and give you my honest truth even though it doesn't feel good to take an opportunity away from somebody it's like you know sweet baby jesus thank you so much i i owe you one so like yeah i was like over the top like nice to this guy but uh reference checks are so important and i do two things differently the one i always ask for like three and then i call those three and i go who else did this person work with yeah exactly i don't give a shit about the three that they gave me i'm just trying to like i'm trying to like figure out who i can reference who i can speak to that they didn't provide but also i won't blow up the applicant spot where if it's like you know it's like someone who i that will be a little bit secretive and not tell their current employer um and then so i do that like crazy and then here's what i ask consistently here's how basically the point is, is I want to hear bad shit about the person.

20:16And I want to figure out if the bad stuff is I'm okay with. And so I say, what are they out of scale one to 10? They always say an eight or nine. And I say, All right, how can they be a perfect 10? Like what's missing? And then that's typically when they'll tell me like bad stuff. And I'm always looking for that bad stuff. And I'm like, well, you know, they've made like mistakes doing x, y and z. It's like, okay, I could put up with those types of mistakes. Or they, they, they like miss deadlines all the time, I'm like, well, I'm not going to put up with missed deadlines. That's I'm not willing to put up with that.

20:46So I like I do a shit ton of reference checks now. So someone taught me a good way to do reference checks. I don't remember the exact question, but it's something along there's there's two things that I do on the reference check. One is you're just trying to figure out, is this person one of the best people that they worked with at that company? And so I'll ask you a question. I asked the following types of questions. I'll say, you know, my experience is that every company, there's like, you can look around the room, and there's two or three people inevitably in every single company who like, they just have the team on their back.

21:15And you're just, you just look at them and you think, man, if we didn't have this person, we would be in a rough spot. Or like, you know, these things, these good things that are happening just probably wouldn't have happened if not for their force of will. And I would be like, you know, who are the people? And I use this to recruit too. I'm like, who are the people like that at your company? Or I'll be like, would you count this person as one of those people? And I'm just trying to see how much conviction they have of being like, oh yeah, for sure. or like, yeah, you know, they're good, right?

21:42It's like, you could say, yeah, two different ways. I'm looking for which one of those it is. The second thing I'll ask is I'll be like, you know, I'm thinking about hiring this, like I'm leaning towards hiring them because I'm kind of trying to disarm them. I'm trying to not make them feel like what they say is gonna like mess it up. But I'll be like, but you know, but what I don't, but I don't feel comfortable with this. I don't know what they're not good at. And everybody has things they're not good at. I'm not sure what, you know, like, I know that they must have things that are going to disappoint me or are going to be things that they're not strong at.

22:11I just don't know them yet. What are they for this person? So I can kind of feel like I have the full picture before I go ahead and pull the trigger and hire them. And that's how I get them to kind of tell me those things. Why'd you write paid tests? What's that? So my thing with hiring is I would say two things have improved my hiring. Number one, paid tests instead of interviews. So I will spend the time. I'll spend three, four hours creating a paid test. So I create a doc that's here's a brief and I'll say I'm going to pay you and depending on the role might be 200 bucks, it might be$2 ,000.

22:47I'll pay you to spend a day on this because I want to see what you do because I just wrote words equal lies. It's like I don't really, I'd rather just see your work than hear you tell me that you're good at work. And so paid tests is now I lean towards that. In the end that saves me a ton of time. The second thing I did I have a buddy who I let invest in one of my companies that I didn't really need as an investor. But I kind of thought, I kind of realized that like, as a CEO, your job is just decision-making good judgment over and over. Are you the CEO of your e-com business? No, I'm more like a chairman.

23:22So I'm not active day to day now, but I will, I don't. So what I'll do is I'm like, Oh, CEO's job is just decision-making or any leader. Let's forget the word CEO. Just any leader's job is decision-making. How do I get my decision-making to be better? and like the difference of making 10 to 20 percent better decisions every single month adds up that that creates a very different outcome so i brought this guy in and i and what i told him i go you know i really want your help hiring and he's like yeah sure i'll you know see if there's anyone in my network i go no no i want you to do three interviews for this one role for me i'm hiring a cmo and i chief marketing officer and i think this is the make or break hire for this business i want you on the call and i want you to lead the interview and i want to listen and so we did two things first i would interview them separately you you did an investor you you let an investor do that he's my one of my best friends and yes he invested my got it uh and he's he's himself a founder and and whatever so he's just got a lot of experience and i've seen him make great hires and so what happened was i would interview them then he would interview them i would like them and he'd be like no trash and i'm like what interesting uh what makes you say that what did i like what did you not like and the thing for him was always like uh yeah i pressed him for specifics and he didn't have any he's like and what i realized was he presses for specifics way more than i was previously doing so i would say like um i would try to figure out do you have experience doing this uh you know how would you rate yourself in this tell me a story they would tell me one story what he would say is like um cool what are the what was the revenue when you started what was it you know and then how did it grow in the first 18 months and they're like he's like, if they don't even know that number, then they're out.

25:01You know, if you're CMO, you don't know how much of the revenue changed from day one to day, you know, month 12 or whatever, you're out. And then he's like, they would say the number, he'd be like, cool. What were the three things that you did that most impacted that? And he's like, you know, if you can't tell me three wins you've had in the three years you've worked there that like most impacted the, and then he would say, oh, you did that thing. Okay, cool. Can you screen share real quick and just show me like, you're saying you did this. Can you just show me how you think about this? I want to hear you talk out loud and i was like oh okay there's a different level level of specificity here that i need to be doing in my interview so a very useful thing was seeing how a master does it so that i could up my game that's kind of an interesting thing because i've changed i did to 180 what was your before what you're after i would create my before is i would create like the most ambitious goals um because it was just like it was like mental masturbation of like just using this spreadsheet and like saying like yeah we're gonna 3x this year and then like yeah I'm like I'd be like yeah can you like change that three to a five and change this zero to a nine and like it's like boom we're there all right get after it guys like and I didn't understand that like a they're the one doing the work so it's kind of bullshit that I'm like creating these crazy goals that there's no math behind it I also thought that like really ambitious goals were inspiring um I actually think achievable goals are inspiring.