In this episode, host Josh interviews Ryan Deiss, founder of DigitalMarketer, about the smartest way for entrepreneurs to hire their first employees. Ryan explains why business owners should avoid hiring assistants for minor tasks and instead recruit experienced professionals who can fully own critical business functions. He discusses overcoming fears around big hires, financial considerations, and the importance of mapping out your value creation process. Ryan also shares strategies for systematizing operations and building a team that enables real growth and freedom, rather than creating more management headaches.

Chapters:

Introduction to Ryan Deiss and Episode Overview (00:00:00)
Host introduces Ryan Deiss, his background, and the episode’s focus on business operating systems and hiring.

Common Mistakes in First Hires (00:02:12)
Ryan explains what not to do when hiring your first employee, warning against hiring assistants for minor tasks.

The “Genius with a Thousand Helpers” Trap (00:02:56)
Discussion on why hiring helpers instead of professionals leads to more management and less freedom.

Hiring Professionals to Own Critical Functions (00:03:46)
Advice to map value creation, identify weak spots, and hire experienced professionals to own those areas.

Overcoming Fear and Financial Concerns in Big Hires (00:04:37)
Ryan addresses the fear and financial hesitation of hiring high-level employees and how to mitigate it.

Cost Comparison: Professionals vs. Multiple Helpers (00:06:14)
Breakdown of the financial and operational impact of hiring one pro versus several lower-level helpers.

The Real Cost of Ineffective Hiring (00:07:48)
Explains the long-term frustration and wasted resources from hiring multiple helpers instead of a pro.

Path to Entrepreneurial Freedom (00:09:18)
Ryan outlines the goal: remove yourself from all value creation steps by hiring pros for each function.

Debunking the “Learn It Before You Hire It” Myth (00:10:13)
Ryan refutes the idea that founders must master a function before hiring an expert for it.

Three Actionable Takeaways (00:11:39)
Host summarizes key actions: value creation mapping, overcoming imposter syndrome for big hires, and automating processes.

Closing and Where to Learn More (00:13:31)
Ryan shares where listeners can learn more about his programs and communities.

Links and Mentions:

Tools and Websites 
Founders Board

Key Takeaways 
Value Creation Mapping: “00:11:58”
Overcoming Imposter Syndrome: 00:12:59
Automating the Value Creation Process: 00:13:28

Transcript:

Josh 00:00:00  Today I’m super excited to introduce to you Ryan Deiss. Ryan is the founder and the CEO of The Scalable Company Digital Marketer, and a founding partner at Scalable Equity, LLC, a venture equity accelerator that builds and acquires B2B media and software brands. He is a bestselling author, founder of multiple companies, collectively employing hundreds around the globe, and one of the most dynamic speakers on business operating systems in the United States today. So welcome to the podcast, Ryan.

Ryan 00:00:32  Thanks for having me. It is not difficult to be among the most dynamic speakers about business operating systems, because most people would consider that to be like watching paint dry. But I think it’s I think it’s pretty sexy stuff, so I appreciate that.

Josh 00:00:47  Hey, and I agree as well. Typically it is, it is one of those topics that most people, I think tend to avoid, right? If you go to a conference and you’re like, which one should I go to? I think the shiny object is always like the newest marketing hack, right? Or like social media? and with your experience obviously running Digital Marketer, you’re you’re well versed in that.

Josh 00:01:09  And I think you could argue you’re one of the most well-versed in digital marketing itself. But today we’re going to be talking all about business operating systems. So how do you know who should be your first hire? Right. is it kind of going along that customer journey, so to speak, or your value journey that we’re talking about here? And is it identifying, you know, hey, actually our secret sauce is in product innovation, right? Like that’s our secret sauce. That’s where it seems like we’re bringing a lot of value, especially on Amazon. Right. You talk about, you know, bringing traffic. It’s like well Amazon’s brought traffic to you. Plus they have the fulfillment engine. So like they’ve tackled two big levers for a lot of people right. so if you identify like, hey, we’re really good at product innovation or something like that, Does that mean, hey, I should first hire out that product innovation? Or do I need to figure out a product? Do I need to hire a project manager? Or is it an executive assistant? Like, how do you go through the process of deciding who to hire first and why?

Ryan 00:02:12  So let me answer the question by telling you what not to do.

Ryan 00:02:14  And then I’ll come back around and give a more explicit answer. So what most people do, and it’s not what you should do, is they go around and they look at all the stuff that needs to get done, right. And it’s their name in all the boxes. And so what they say is, okay, I need to get somebody to help me with all of the little things so that I have more time to do these quote unquote important things. Right? So I need to hire, you know, a virtual assistant to help, like, answer my email and to deal with my scheduling. And, you know, I need to hire somebody else over here to, you know, respond to this and take care of that. And, you know, in this particular step, if I, if I just had somebody to help me do some of the pieces of this, you know, then, you know, then then I could be more efficient. And what we’re doing when we do that is.

Ryan 00:02:56  And the reason that’s not what you do is you’re what is known as the genius with a thousand helpers. Okay. And so you’re not actually creating any additional space and freedom for yourself. You’re just adding the management of other people and the tasking out of other people to your already cluttered to do list. And that’s why it doesn’t work. And that’s why ultimately these people wind up failing and we’re like, oh, they suck. And they were supposed to help me. And they’re supposed to take time off. And they’re not. They’re just asking me all these questions. I don’t have time to answer all these questions. Right. It’s because we didn’t hire someone to own a critical aspect of the value creation process. We hired somebody to help us continue to own that process. So what I would encourage you to do is look at the value creation flow and to say, what are the critical tasks and processes that I don’t like. And I’m not particularly good at, but I’m currently being forced to do okay.

Ryan 00:03:46  So it’s incredibly critical. It’s incredibly important. But you don’t necessarily like doing it and and you don’t necessarily. You’re not necessarily the best in the world at it. So let’s say again, you know, you’re running an e-commerce business and you really love the product side of things. You love the innovation and the sourcing. you love, you know, thinking about the packaging and the positioning, but you’re getting the bulk of your traffic, let’s say, from, you know, Pinterest and Instagram. And really, you don’t geek out that much on Pinterest and Instagram, but you’re good enough at it, right? So what people would say is like, I guess I’m gonna get somebody to help with photography and maybe somebody can write some of the descriptions and do a little bit of screw that. Hey, I need a head of marketing that can own this entire section of this and higher, big, higher up, and let them build out the team. Now, why don’t we do that? Okay. We don’t do that because we’re scared.

Ryan 00:04:37  we’re scared because that person that we’re going to hire, well, they’re going to be a more expensive person. And and I don’t know if we can really afford that right now. And so we don’t make that big hire, right. And we’re also a little bit nervous to make that hire because because it’s the thing that we’re not as good at. How do we even know that we’re hiring the right person? So the way that you cover the second piece is you get help, right? If you suck at marketing, but you know you need a marketer, then get somebody on your advisory board, get an A in a group with smart with smart marketers where they can say, well, you can go to them and say, hey, we can kind of help me build out, like, who this should be. You know, what should the job description look like, what my experience level and maybe even help with the interview process. Okay. Get somebody in your corner to help. That’s how you do that.

Ryan 00:05:21  Even if you gotta pay them a little bit. We’ve hired consultants before to help us with an interview process. Some of the best money we’ve ever spent. and so. But truly, if you’ve got an advisory board or a network, just ask for help. I’m sure you got friends in the industry that would help you. So get get over to that one. Okay. You’re the CEO. You’re. This will not be the last time you hire for a job that you know nothing about, okay? It’s very figurative. So let’s talk about the the investment side. What people don’t realize is that, let’s say you got to hire somebody and let’s say it’s a it’s a big role. They’re going to make 120 grand a year. They make 10,000 a month. Okay. two things. Number one. they come with a 12 month finance plan. Okay, so it’s not like you hire somebody for 120 grand a day. You gotta cut them a check for 120 grand, okay? You’re going to pay this person approximately $10,000 a month, plus 18 to 20% for all the other stuff that goes along with it taxes, insurance, what have you.

Ryan 00:06:14  or you can hire 2 or 3 helpers to help you do all the other little stuff. And guess what? Collectively that’s going to cost you at least that much. If not, but they didn’t actually remove anything from your plate because they can’t actually at lower level employees, entry level folks, they can’t own a result. And so you’re going to work with them a lot longer. You’re gonna have to invest a lot more time in training them, in managing them. you’re going to give them a lot more time, right where you’re going to go and be like, oh, yeah, I mean, it’s been six months and they’re not helping a lot, but they’re just learning all this stuff, right? Whereas you bring somebody in, you know, for 120 grand, 150 grand. Who cares? They got experience. High level people should be a creative, meaning they should be paying for themselves in the first 90 days. Well, they’re gone. Yeah, and that sounds harsh. But you know who gets that? High level people.

Ryan 00:07:02  They get that experience. People get that, and they’re not going to take a job unless they know they can do it. And so you figure, let’s say that you’re going to pay them $15,000 a month, right? $15,000 a month. Well, they’re going to take off a massive chunk. So just in not having to worry about this, you’re going to be able to make that up. Piece of cake. Okay. But let’s compare it to the option B right. You’re paying this 15 grand a month and you’re going to know in 90 days you’re paying for themselves in 90 days. So really it’s a $45,000 bet. And now, by the way, we bumped this person up to 165 grand whatever in salary. Just so we’re clear. High level person. You’re not hiring people that, you know, expensive. But let’s say it’s 15 grand. Now let’s go back and say that we’ve hired, two people at $4,500 a month. Okay. Right. So now we’re thinking, okay, we’re at about nine grand.

Ryan 00:07:48  Throwing an extra length, you know, ten grand. They’re really helping us out. We’re not getting any gains from anywhere else because we’re managing these people and we’re trying to help. We’re trying to make them successful, and. But they’re asking us a lot of questions, and we’re getting a lot of shoulder taps. And hey, do you have a minute? And hey, I can’t move forward until I get your feedback on this. Like that kind of stuff. So we’re not actually gaining any capacity. We’re not actually getting a lot more done. You’re actually more frustrated. But because, you know, it’s not quote unquote their fault, you know, you’re eight months into this thing and you’re only just now beginning to ask the question, maybe I made the wrong decision. So you’re a full 12 months into this deal. You know, you’re almost triple what you have invested with the individual. You haven’t gained anything, and you have to start all over again. And that’s when you declare, well, maybe I just might.

Ryan 00:08:30  I should just keep my business small. Maybe scaling it to eight figures. I shouldn’t do that. It’s too much work. Employees suck. I’m just going to have it be a small seven person kind of thing. It’ll be a little lifestyle business. Yeah, maybe it could have been more, but I don’t want to mess with that again. I don’t know if anybody else ever said that, but I hear it all the time. And it comes on the heels of a massive hiring spree. being a genius with a thousand helper not actually making the call to hire the big functional pro to come in, and to take significant stuff off your plate. So that’s how you do it. Start with I’m not that good at this, and I don’t really like it. Hire a pro to do that. Then slowly begin not, you know, as quickly as possible, but responsibly begin handing off the other things until eventually you can look at your entire value flow and you’re not your name is not in any of them.

Ryan 00:09:18  That should be the goal of every entrepreneur. That’s when freedom happens.

Josh 00:09:21  Yeah, man, I love that Ryan. And I’ve already got a few mindset shifts, just as you were talking about that. I think that the common I think thing that you hear people say or preached at you is that you can’t hire somebody unless you know, you know, what you’re hiring for or like creating that, you know, job description you mentioned like being able to go to advisors or other people that are more experienced in, let’s say, the marketing realm, so to speak. Right. That could actually help you craft the right job description, set KPIs and things like that. versus the person that has to go in there and hey, I’m going to go hire this marketing person. Well, first I have to go figure out marketing, right? Because I need to learn how it works. Then I can hire it out. Why? You know, break down that barrier. Why? Why is that?

Ryan 00:10:13  Because it’s that’s not the way that any real company actually works.

Ryan 00:10:16  You’re telling me that Jeff Bezos said before we can build out any significant fulfillment centers, I have to learn every aspect of robotics. Come on. Like anybody who says that they’re just either incredibly inexperienced or naive, or they’re so freaking arrogant as to believe that they’re the only ones that can possibly figure this stuff out. and then they can teach it to somebody else. Deals. Yeah. Horse crap. There’s so many functional things where people have been doing this for their entire lives. And you’re saying like, well, I’m not going to hire somebody who’s who’s actually a pro at this. I have to first figure it out myself, and then I’ll teach it to somebody. That’s just not the only thing works. I’m not going to hire a heart surgeon until I learn heart surgery myself. Then I’ll explain it to somebody who, I guess maybe went to medical school, but maybe not, I don’t know. The point is, if I know it, then I should be able to share it with somebody else.

Ryan 00:11:08  Then they’ll know it and then they can do it for me. It is just incredibly asinine. Limited thinking. It’s not true. It’s not the way that real business is done. And anybody who’s saying it is just wrong. They’re wrong. And if you think it doesn’t even make any freaking sense, it’s not how any real business works. It’s just wrong. Now, am I sympathetic? Of course I am, because I’ve said the same stupid crap before, but it doesn’t make it any less stupid crap. No, you don’t have to learn it yourself. If you do, you will simply burn yourself out and stall the growth of your company.

Josh 00:11:39  I love to leave the audience with three actionable takeaways from each episode. Here are the three takeaways that I noted. Ryan. Let me know if you think I’m missing something. So, number one from today’s episode, I would say, like, if you haven’t done this before, go do your value creation mapping right? Could be your customer journey, but go back.

Josh 00:11:58  Hit rewind. Ryan walked through all the different like steps that you should consider in that value creation process. You need to do that. And honestly, I, I can say that now because Ryan and I jumped on a call about two years ago when Covid was tanking our business, and it was like, dude, where are you? Where are you generating your revenue from? Are you making money from these blogs that you’re trying to start? And this whole membership program is like, well, no, everything’s coming from Amazon. Then why why are you supporting this other side of the business? Right. And like it was this finally like this moment, even though it was like kind of right in front of my face the whole time. Like that simple exercise will reveal wonders for your business. Action item number two. I would say, is overcoming that imposter syndrome and being able to make those executive hires, so to speak, right? Those bigger hires, people that are experts in their space. You’ve got to be able to create the ROI, right? Or see and calculate that ROI that that team member can provide.

Josh 00:12:59  You’ve got to just frankly, like shift your mindset and you’ve got to get used to it, especially if you want to be a business owner that can scale businesses. Last but not least, is going to automating that value creation process, right? If you’ve if you’ve already checked the boxes, you’ve got capable people on your team. Now it’s time to automate that value creation. And then especially establishing that decision making framework that you’ve talked there, talked about there at the end. Ryan, anything I’m missing?

Ryan 00:13:28  No. Seems like you got all the got all the high points.

Josh 00:13:31  Ryan, thank you so much. You’ve shared a lot of value with our listeners today. If people want to learn more about what you have going on at the scalable companies, where should people go to learn more about you and, join your programs?

Ryan 00:13:44  Yeah. I mean, if you’re looking for, a, you know, a mastermind, a network of other seven figure folks looking to scale to eight outside of e-commerce. So e-commerce folks, but also other business, I think there’s tremendous learnings that can happen across business models.

Ryan 00:13:58  That’s what we do in founders boards. So yeah check out foundersboard.com. And if it seems cool then apply. let us know in the notes that you heard about us through through this podcast and through the Hadley’s here. And that that will only do favors because you know I like you Josh. And mostly, though, you know, I like I like the actual boss. I like it better, but, But you’re good to go.

Josh 00:14:22  Hey. Well, I appreciate it. Sorry you got stuck with me today, but.

Ryan 00:14:25  I’ll take it. I’ll take.

Josh 00:14:26  It. Awesome. Well, thanks so much for your time, Ryan. We look forward to following up with you later. But thanks for your advice today.

Ryan 00:14:33  Thanks, buddy. Appreciate it.