How Dan Buys Back His Life
The Buyback Principle: Don’t hire to grow your business. Hire to buy back your time. You can’t personally outwork yourself to a better business. The problem is you only have twenty-four hours a day. Eventually, if you’re doing everything, you (or one of your relationships) will break down.
If you keep grinding, you’ll eventually hit the Pain Line, where you’re experiencing so much pain when you try to grow that you’ll do one of three things: stall it, sabotage it, or sell it. When you hit the Pain Line, it should act as a feedback loop—this is your opportunity to embrace a new mindset or to continue on in the status quo, waiting for something to snap.
A Buyback Loop occurs as you continually audit your time to determine the low-value tasks that are sucking your energy. Then you transfer those tasks, optimally, to someone who’s better at them and enjoys them. Lastly, you fill your time with higher-value tasks that light you up and make you more money. Then start the process over again.
The DRIP Matrix
Science shows that people perform better working on tasks they enjoy. Higher performance leads to higher pay. Every task you perform sits on two axes: one of money, one of energy. Each task brings you from little money to lots of money, and either drains you or brings you more energy.
Many entrepreneurs hire away the parts of their business they love the most. This typically happens accidentally—as they grow, they don’t hire to buy back their time, they hire for a position or role, mistakenly making themselves the administrator of their own company.
80% done by someone else is 100% freaking awesome. The DRIP Matrix: Delegation (less money, drains energy). Replacement (more money, drains energy). Investment (less money, gives energy). Production (more money, gives energy).
The 5 Assassins That Kill Your Success
The Staller: You sabotage your own success by hesitating on big decisions.
The Speed Demon: You make rapid decisions, such as hiring the quickest/easiest/cheapest option. Then you find yourself in the same position again.
The Supervisor: You fail to properly train, micromanaging others, failing to empower them to grow and learn.
The Saver: You have money in your bank account but don’t understand the value in spending it on growth opportunities. You let it grow like a nest egg instead of investing it in your business.
The Self-Medicator: You turn to food, alcohol, or other vices to reward yourself when you have success. Then you rush to the same destructive activities to escape failure or pain.
Research confirms what business coaches have observed for years: most entrepreneurs are addicted to chaos. Your ability to deal with chaos gives you an entrepreneurial advantage, but can also make you subconsciously seek out chaos.
Your chaos addiction shows up as one of the 5 Time Assassins: the Staller, the Speed Demon, the Supervisor, the Saver, or the Self-Medicator. Most people bounce from one assassin to the other without facing the root problem: addiction to chaos. Becoming the person you want to be requires you to get real with any demons.
The Only 3 Trades That Matter
A Level 1 trader is an employee trading their time for more money. A Level 2 trader is an entrepreneur trading their money for more time. A Level 3 trader is an empire-builder trading their money for more money.
$100 million companies weren’t built on $10 tasks. These are the only three trades you can make. Most people, even if they own their own business, are firmly entrenched in being an employee who is selling their time for money. Buying back your time starts when you begin using the money you have to repurchase your time.
The Replacement Ladder
After removing smaller items off their plate that are sucking them into the Delegation Quadrant, many entrepreneurs get stuck in the Replacement Quadrant. Here, tasks are valuable, but they are still draining the founder of energy.
To get out of the Replacement Quadrant, you can use the Replacement Ladder to systematically follow the rungs, in order, to remove tasks off your plate in a way that aligns with the money you have available. Often, something you’re good at (but isn’t in your Production Quadrant) is the most difficult to transfer to someone else. You have some skill, and you can execute with a fair amount of expertise. But you can’t move up the ladder until you off-load the responsibility of that task.
Typically, you’ll want to follow the ladder up, in order, beginning with an administrative assistant. If you have an established company with many employees already, it may be useful to consider how you’re currently feeling, and then focus on that rung of the ladder. There are five rungs to the Replacement Ladder, with associated feelings, key hires, and responsibility of ownership. Here’s a snapshot:
Smart leaders don’t tell others how to do something. They tell them the end results that need to be achieved. Then they allow the other person to use their individual creativity to figure out the how.
Every person in your organization, from the frontline worker to the CEO, has responsibilities, their own individual “monkeys.” When given the chance, humans are prone to putting their monkeys onto others, and we’re all prone to adopting their monkeys too easily. Don’t. Ensure that each person is empowered to handle their own responsibilities.
Many leaders manage their organization by telling staff what to do, checking their work, then explaining what to do next. That’s transactional management. If you do this, eventually the entire organization will come to you for answers on what to do next, and you’ll hit the tell-check-next ceiling.
Instead, you can embrace transformational leadership, in which you give an outcome, offer a metric to measure progress, then coach to success. In this way, you’re joining the employee along a journey in which they ultimately grow and learn to make decisions without much involvement from you.
Dream BIG. Achieve Bigger
You need a huge inspirational picture of what you’re working toward. Entrepreneurs are uniquely situated to positively affect and change the world. Big ideas inspire innovation, excite others, help you overcome distractions, and make many business decisions easier.
Phase 1: The first step to creating an inspirational 10X Vision is to dream without limitations. Don’t worry about how you’re going to do it, just consider what you would do without any limits.
Phase 2: Big dreams eventually need crystal clarity. Once you can describe your future vision with the same specificity and detail with which you can describe your current situation, you’ll have a vision that can motivate you today. Specifically, entrepreneurs need a clear vision that has these four elements: a team, one business, their empire, and their lifestyle. If nothing else, dream big!