362: How to Delegate with Shaan Puri

Shaan Puri from the My First Million podcast joined me to host a workshop on delegation and hiring. We discuss how we hire, attract talent, manage employees, delegate, and build businesses without working 80-90 hours a week. Many entrepreneurs get trapped by staying way too busy every week when the real winners delegate well so they can focus on the most important issues in their business and find balance in their lives.

Shaan started his career with a restaurant, followed by poker, followed by a failed biotech company, and then moved to Silicon Valley and eventually became an internet entrepreneur. As he’ll describe it, he failed for 8 straight years despite everything being handed to him. The truth about failure is that it doesn’t feel fun even if you recognize at the time that you’re learning. But Shaan hit a breaking point just as he was about to turn 30, and his next startup got sold to Amazon., he started one of the top business podcasts in the world, launched an 8-figure e-commerce business, and even more.

No matter how good you are at design, sales, operations, or anything else, hiring and delegating is a different beast. Some businesses are harder than others, but the business is no excuse. You can find successful examples in every industry of a business that was able to scale, and so can you. In 2012 at Storage Squad our lives were hell. We didn’t have a business, we had a job. My partner and I didn’t know how to manage people, how to hire, or how to delegate. We kept complaining about employees, the hiring pool, and everything else that was going wrong. Eventually, we realized that we were the boss, this was our company, and we couldn’t blame our employees or our customers. We looked at the local Lowes that was able to staff 300 employees in the store year-round with constant turnover. If they could do it, so could we. From there on out, we took ownership that anything that went poorly was our fault.

Delegating and hiring are uncomfortable because we don’t get practice at it in school or sports. You don’t get to practice leading and guiding other people. The only way you get better at delegating is to pick up the weight and do it. Make a hire, start failing forward, and learn your stuff. Every business owner has a tedious and repetitive part of their business that’s a time suck, and you can hire and find immediate value in filling that task. It’s an investment, your first employees will be value multipliers for what you pay them.

As an early entrepreneur, you need to get scrappy with hiring. We can’t hire recruiters or make Indeed posts and have talent come our way. We need to hunt for the 80% of talented people ambivalent about their current jobs and find them where they are. People want to post on LinkedIn or Indeed and hope that A players will come up and approach them, but you need to go out and hunt. Nobody will walk up to you and care about your business as much as you will.

I used to carry business cards everywhere and would hand them out to employees doing an excellent job somewhere else. I even hired a Walmart cart returner once. If I saw somebody doing an excellent job I would pitch what we do, what we pay, and what makes us great to work for, and that they should contact me if they know of anybody looking for work. I have friends who have hired bartenders, fast food employees, and retail workers, and had a ton of success with it. You have to get out there and hunt.

Once people are on board, you need to train your employees so that they don’t just create more work for you. The first level of delegation is continuously telling your employees what to do and how to do it, and you can build a million-dollar business on just that. But every problem will be your problem, and the business can’t scale without you. The second level of delegation, and the real value in it, comes when you get people to make decisions in your company. This requires training your employees to think and make decisions well.

When an employee walks into your office, they’ll come to you with a question or a problem as the monkey on their back. Their instinct will be to hand the monkey off to you so that it’s now your problem, and your instinct as an owner will be to dismiss them and say that you’ll handle it. It’s easier and faster in the short term to do something yourself than to train somebody. But at the end of the day, you’ll find yourself with an office full of monkeys. Every problem in the business has come to you, and suddenly you are the bottleneck of the business.

When an employee comes into my office, I never solve the problem for them. I’ve either walked them through how to solve the problem or guided them on how to think about it, and they leave with their monkey. The beauty of this is that the employee gets to practice making decisions themselves, and I get a look to see if they’re good at it. Your employees will be as needy as you allow them to become, and really good employees will just recap to you what happened and their decisions after the fact.

The harsh fact of the matter is that many employees will underwhelm you with their decision-making, and you’ll need to take control back from these people. You can’t let promoting autonomy get in the way of business success. But some people will succeed and show value, and over time you can bring these people up and put them in charge. Make them the managers that are the barrier between you and your other employees.

It’s a repeated belief that employees want autonomy, their schedule, to be their bosses, and to make decisions. This makes entrepreneurs mistakenly believe that their employees want the same chaotic environment that entrepreneurs do. In my ten years of experience, I’ve found that to be untrue. Employees want to be told what to do, they want a clear structure and schedule, clear expectations, and to go home after work and watch Netflix or hang out with their family. If an employee wanted chaos, they’d become entrepreneurs.

Shaan has a philosophy to give his employees this type of structure through what he calls one metric management. Every employee at his companies has one metric that defines their objective and measures their success. He recently hired a CMO for an e-commerce brand and wanted someone who could triple their marketing output and cut Shaan’s time in the business in half. The new CMO was able to achieve this in about six months because his goal was clear. This approach allows Shaan to set clear expectations for all employees and for him to understand quickly and easily how everybody is tracking toward their goal.

As Shaan scales in his businesses, the first role he likes to hire is a virtual assistant. As an owner, you’re usually the bottleneck of the business early on. Basic administrative tasks can bog you down when you should be adding value, and a virtual assistant can free up hours of your day. Shaan gets a daily brief from his assistant with his schedule and top priorities for the day and can cut down the time spent on his email to just two 20-minute sessions a day, as his assistant can filter through and organize the most important messages.

Accretive roles like sales and marketing are the second pieces Shaan likes to hire since they can directly bring cash into the door. By outsourcing international talent, he’s able to scale while maintaining cash flow, and savings in total upwards of $50K a month on wages. Both Shaan and I believe that if you’re not utilizing this as a small business owner, you’re leaving your money on the table.

Getting great at hiring and delegating requires getting uncomfortable first. Your early hires should reduce your daily stress and free up time for you to make sales, and that’s an incredible value. Most business owners see a problem and ask how they can solve it, but a great delegator will shift their mindset to ask themselves who they can get to solve it. If you delegate well, you won’t have a job, there will be no regular crucial tasks for you to complete every day or every week. My job is to hire people, train them, and set them up to succeed, and that’s how my companies will succeed.

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I started the Sweaty Startup in December of 2018 because I believe the Shark Tank and Tech Crunch culture is ruining the real spirit of low-risk entrepreneurship.