Episode 644 | Buying Back Your Time with Dan Martell

Rob Walling:
Welcome back to Startups with the Rest of Us. I’m Rob Walling, and this week, I talk with Dan Martell about his new book, Buy Back Your Time. I read most of Dan’s book in preparation for this interview, and it’s really an interesting combination of productivity, of being effective rather than being efficient, and also a healthy dose of delegation. And if you’ve read books like The Four Hour Work Week, where Tim Ferris had the first part about being effective and delegating, and then the second part was about starting a business using AdWords and doing smoke tests and stuff. Buy Back Your Time is more of a fully fleshed out model with a bunch of frameworks. Really well done diagrams too, by the way, the book is gorgeous. Obviously, Dan hired a good designer to put this together, but I was impressed by the depth and the uniqueness of these frameworks that Dan uses in this book.
In fact, when I got done reading it, I actually told Sherry that she should read it because she’s right in the midst of hiring a chief of staff and getting a lot of things off her plate, and I felt like there’s a lot in this book that she could learn from, a lot in this book that I learned, and I think if you’re someone who has trouble delegating, has trouble feeling like you’re being effective, it’s obvious that Dan has spent a lot of time thinking about this. And this is from a founder’s perspective, so it’s highly applicable to folks like you and I. And if you’re looking for another book to read, just a couple weeks ago, I was able to get my book website live. It’s my fourth book. It’s called The SaaS Playbook; Build a Multimillion-Dollar Startup Without Venture Capital, and it’s at saasplaybook.com, if you want to see all the ringing testimonials and endorsements from folks like Jason Cohen, Dharmesh Shah, Noah Kagan, and so on. And read a little more about what’s in the book.
See the cover, see a few picks of the inside. The designer right now is working on all the diagrams, and this is why I noticed Dan Martell’s diagrams in Buy Back Your Time and how nice they are because I’ve been looking at my own for the past few weeks. But anyways, head to saasplaybook.com, enter your email if you’re interested in hearing about the Kickstarter, going to be doing that in a couple months. But with that, let’s dive into my conversation with Dan Martell.
Dan Martell, welcome to the show.

Dan Martell:
Rob. Thanks for having me, man. Obviously really excited, big fan. This is cool. This is exciting.

Rob Walling:
Yeah, it’s going to be fun. We’re going to talk about your experience and about your new book, Buy Back Your Time. If folks think shut up and take my money already, buybackyourtime.com. The book came out today, as this episode goes live. You told me offline, two and a half years to write this book. That’s a lot longer than a lot of people take. What was that process? Why did it take so long?

Dan Martell:
It took a while because… It’s funny, Buy Back Your Time is about the buyback principle. My philosophy in life is, before I say yes to something, I actually ask myself the who question, who do I want involved in this project? So it started with Ron, literally, he’s my book CEO. Ron Friedman, he’s multiple time bestselling author. He called me up, consumer of my YouTube channel and was like, “Dude, how do you not have a book yet?” And I was like, “Ah, it’s just not a priority. I’m kind of busy. I’ve run two companies.” And he was like, “Well, you need a book, would you collaborate with me on it?” And I was like, “I’m open to it. Tell me what you got.”
And it’s cool because I think, I don’t know about you, Rob, but the more you build and the more you stay in your lane and you just really try to focus on becoming tip of the spear, and Naval talks about this, the three levels of luck, where level one is you’re just lucky, you win the lottery. Level two is you work hard, you become lucky. Level three, if you’re great at what you do and you do one thing. I’ve only ever done, similar to you, is just software and B2B SaaS.
You eventually have other people come to you with their luck. So their level two luck comes to you. And that’s how I feel with Ron, he’s the one that came to me. He’d obviously had success in books and he was like, “Hey man, I’d love to help you do this.” So that’s why it took two and a half years is because we then worked on a book team, and I also know I’m going to write dozens of books in my career, and I wanted to lay down the foundation and process.
So I actually approached this as almost building the rhythm for writing a book every three to four years. So it wasn’t just, sit down and write, it was, okay, researcher, editor, agent, book team. Even on the marketing side, Daniel on my team who’s managing the launch, these are people I want to work with on all my books. So that’s really why it took so long. And then just the amount of editing, I probably earnestly edited it three big times, full edits. The first version was twice as long, and then it was like 70% or 30% less. And then we went away for five days with my copywriter, Chris, and we just attacked every paragraph in sentence and then did a final restructure, because I’m very framework focused and I remember the first version of my book, my editor Noah goes, “I need to explain…” He’s very kind.
I was like, “Dude, can you just skip to the end?” He was like, “I need to explain to you the difference between a university textbook and a bestselling book.” And I was like, okay, let’s… And he just explained, obviously. I’m just so… If you started reading the book, for me, it even feels like I wanted to grab some of these frameworks and put them in first paragraph. But he’s like, “Look, we need to get people invested in the story and invested in the concepts and then we can start unpacking it.” So I’m really, really, really happy with where it landed. I just finished reading the audio book not too long ago, added bonus stuff.
So literally at the end of each chapter, my audio engineer, Jessica, has never seen somebody do this, but because I do so much videos on YouTube, I literally would just riff. And I would just, at the end of the chapter, I’ve been doing a lot of keynotes on the topic. So I grabbed all the new stuff that obviously didn’t make the book and added it as audio bonuses. So yeah, it’s just been an incredibly fun and creative project, but that’s why it took so long.

Rob Walling:
Instead of just building a book, you kind of built a book factory, I’ll say. Like in programming, there’s factories that would make other objects. And I don’t mean that in terms of churning out the content, but you built a whole structure around producing a book every three to four years, which I think is super cool.

Dan Martell:
And I use an agile development process. I literally took the same philosophy of software development and just applied it to book writing, which drove a lot of my team members crazy because that’s not normal, the way we did each chapter and created a review and literally ran it a sprint process. It was kind of awesome for me because it kept me really close to the final product so that when I came back to edit, I didn’t feel like it was just such a departure. But yeah, it was neat to try to figure out what does the industry do, and then what do I need to have happen so that I feel good about it? And then try to merge both.

Rob Walling:
I just finished my fourth book and I think I’m going to be running a Kickstarter here in the spring, and they’ve all been self published. What I’ve never done before is hired a project manager, which I did this time, then she went out and hired an editor, a cover designer, whatever else, all that there. The interior layout, the interior designer for images, blah blah blah. And now, to your point, I’m already excited about writing my fifth, because I now have a team that as long as they’re around in a year or two, the next one will be coming as well. So I guess that’s what entrepreneurs do, is we build structure and we build repeatable things. If you’re used to building SaaS and software, you don’t want to do it once and throw it away, you want some type of SOP. And so I want to dive into what you call the buyback principle, which is, don’t hire to grow your business, hire to buy back your time. A little counterintuitive, talk me through what that means, flesh that out for listener.

Dan Martell:
Yeah, I call it calendar over capacity. So oftentimes, entrepreneurs, they just keep building. And people have never built companies, they don’t know any better, there’s nothing wrong with it. It’s like, you start a business, an agency, a software company, and then it’s like, I need a hire developer, I need to hire somebody to do copywriting or whatever, and you just keep hiring. The challenge with that approach is, as the CEO, at some point, you’ll hit what I call the pain line. And the pain line is this point where any more growth will create more pain in your life than you’re able to deal with. And what that means, usually it happens, it is different for different people to hit ceilings, but on average, it’s usually about 1.2 million in revenue and about a dozen employees. Where you wake up, you go to work, and you manage all these people.
Are there projects being done? Are they doing it right? You’re checking their work, and you have all these aspirations to get a ton of stuff done that day, and it’s literally three or four in the afternoon, you haven’t done anything except being in meetings. And you’re literally doing all the work that nobody else wants to do, right? You’re managing and project managing and coordinating and paying bills and dealing with fires and all this stuff. And what happens, and this is the biggest risk for business, is the pain line is, they usually, when entrepreneurs feel this, they do one to three things. I call them the three S’s. They either stall, they decide, “I don’t want to grow anymore, I want to just grow five, 10% a year, or last year was more profitable and I worked half the time, so I’m going to go back to that size.”
The challenge with stalling is, your customer’s not going to stop wanting more things or the market’s not going to stop desiring growth. GDP growth happens whether you like it or not. And the truth is, and this is a big one, Rob, as you know, your team wants more opportunity. So if you decide that you want to stall, you’re inadvertently slowly dying. Selling is the next one, which, we get the call, it’s like, “I don’t like this anymore. I thought it would be easier. I had this vision of freedom, my life does not look like that. Maybe I should go do something else.” And then third is sabotage. And that’s an interesting one because sabotage is dragging your feet responding to an email. Because you have a potential partnership in your inbox that could grow your business or you don’t make a key hire decision quick enough and the person takes another job.
All these things that are going to slow you down from winning and succeeding, but you have this psychological adversity and you can feel it on your chest. It’s like pressure and noise. I even talk about the five assassins because a lot of these are self-inflicted. I literally just got a message from an entrepreneur that admitted to me that he’s been drinking way too much this year because of that pressure and noise, and that’s the pain line. So the philosophy of the buyback principle is designed to avoid doing that or hitting that point, because if every time you deploy dollars for labor, right? Because that’s all hiring is, right? I have a resource and I deploy it, that you start first with your calendar and you look at the things that take energy from you and that are low cost to give to somebody else, so that you fill it back up with things that make you more money, that light you up.
Then as you grow through that process, it’s inevitable that you will actually build a repeatable, scalable model that doesn’t have a bottleneck. The reason why they call it a bottleneck is because the constraint is at the top of the bottle, which is the CEO. And when I’ve built all my companies this way, it’s felt way lighter and easier to scale. Whenever I violate this rule, and I go and I hire… I have clients that are like, “Yeah, I’m going to hire a COO.” And I’m like, “But you don’t even have an executive assistant.” They’re like, “What’s the difference?” I was like, “Huge difference.”
Start by just freeing up your calendar and do the work that a COO would do, and get the business to a place where it can actually absorb that type of talent and that cost structure, because that’s not a very efficient way to spend money. So in the book, I obviously break down a bunch of different frameworks like the buyback loop, how to do it, but that is the core reason. If you don’t do it this way, most businesses will end up hitting that pain line and just not succeeding. And I just want more entrepreneurs to build. The whole point is not a four-hour work week, it’s literally to buy back your time to create your empire, to create more art, to give back to the world.

Rob Walling:
So I find it really interesting, you’re talking about hiring a COO without an assistant. You have a whole chapter dedicated to hiring and delegating to assistants specifically. I guess talk a little more about that. You use an assistant extensively. In fact, when we scheduled this podcast, I basically scheduled it with her. And she used my link and then I emailed for the book and she’d said, “Hey, this is Dan’s assistant. I got to this email before Dan did and I wanted to do a quick response.” And so she sent me a copy of the book. So it does seem obvious as you say it, but I’m not sure that I’ve heard someone put it in those terms before of, COOs are expensive folks, director of operations are expensive. If you’re a bootstrap, maybe mostly bootstrap founder, you don’t have the money to hire that. But oftentimes, an assistant, especially if we were to go overseas, they’re not terribly expensive, even for a good one. So flesh that out a little more.

Dan Martell:
So in the book, I have a chapter dedicated to working with an executive assistant because it is literally the highest form of leverage. If I was starting from scratch, we always say, “Start from zero, what would you do?” I would literally hire an executive assistant. I would sell everything I own to keep that person in my life, because it’s literally a one-to-one, 40 extra hours a week of me being able to execute. So in the book, The Replacement Ladder, I literally sat down to explain to people there’s five levels. If you were trying to start from zero and work your way through what types of activities you would hire and what sequence, and it’s based on, again, my background’s in software, I look at it as a math problem. It’s like, I have dollars, and I need to buy back time. What’s the types of activities of the lowest cost that free up my time to go work on the level above it?
So level one is administrative work. And where I think a lot of people make the mistake is, the outcome goals you have to delegate is a hundred percent of your inbox on a hundred percent of your calendar. Why is this? Because I remember one time my brother, he called me up and he’s like, “Okay dude, what’s all the big deal with this executive assistant? I’m super busy,” and he was running a multiple eight figure real estate portfolio and company. Didn’t have an assistant, finally hit his capacity. And I say, “Well, here’s how it works,” And I gave him the structure. Six months later I see him and I’m like, “Hey man, how’s it going?” I was all excited to hear he hired somebody and they were helping them and he goes, “Ah, I don’t know what the big deal is.” And I go, “I know what the problem is. Did you give them a hundred percent of your inbox? As in, they triage your email first and only bring to you the things they don’t know how to deal with?”
He’s like, “No, I just CC them on stuff.” I go, “Exactly. Your inbox is nothing more than a public to-do list for stranger’s, goals and dreams on the internet.” That’s kind of crazy, but that’s how it works. So having somebody else triage that first, all my personal, professional emails go into one inbox, I’m involved in multiple companies. And then my executive assistant, and the reason why I call her an executive assistant, she’s earned that title. Now you can start with a virtual assistant part-time, but you still should delegate your inbox to that person and they triage, and they manage the calendar. Because for me, the way it works is, anything I need is in my calendar. It’s structured, the notes are next to it. When I get on a meeting, it’s all in there, they take care of that, and that way I can go back to back, back and be a hundred percent present.
That’s level one. If you have that dialed in, level two is delivery or fulfillment. It’s, whatever you do, once you sell a new client into your business, somebody else should start to help you with that. It could be onboarding, customer support, could be activating or setting up accounts, managing the customer communication. You might still be involved in the core thing that you do, if you’re a coach, in my world, I still do the coaching, but I do zero other part of that conversation. And that’s level two to just help you build more bandwidth in your calendar. Level three is marketing. You need to have somebody wake up every day and focus, in the two areas there is campaigns and traffic. Who’s monitoring the land?
Rob, how many times have you had something break out there and not know for weeks? It happens to me all the time. A funnel is like, a link’s broken in a funnel, and we’re running ads to this thing. And somehow, somebody saw a comment on a Facebook ad that’s like, “Hey, the thing doesn’t work.” I want somebody to wake up every day and literally monitor traffic, monitor campaigns, and generate new leads for the business. Level four is sales. Now, I actually think most founders should keep those conversations. If you’re buying companies, that should be you, if you’re selling, that should be you. Until it becomes 50% of your calendar. If you’re spending 50% of your calendar on sales or BizDev or whatever type activities, that’s when it makes sense to actually buy back your time and give it to somebody else that owns a hundred percent of the initial conversations in the follow-up.
The ROI of having somebody just pull forward deals in your calendar year that you would otherwise, three days here, four days later, vacation for two weeks, you just put things off. Pulling that forward pays for itself, no problem. And then level five is leadership. Level five is your executive leadership team. That’s when you start thinking about hiring people to lead departments, and you might do director levels or whatever. But to me, those are the five levels of the buyback time, the replacement ladder. If you wanted to argue with me, what’s the dollar I have to spend to buy back the type of activities out of my calendar in the most efficient way for me to fill it up with things that make the business more money and drive things forward?

Rob Walling:
And in order to get there and to evaluate, you have this thing called the loop.

Dan Martell:
Buy back loop.

Rob Walling:
Audit, transfer, fill, right?

Dan Martell:
Yeah.

Rob Walling:
Once you experience the pain, then you audit, you transfer and fill to find those three to help folks understand how to go about this process.

Dan Martell:
Yeah. So the way I think about it is, there’s this process that will never end. Unless you just decide I don’t want to grow anymore because I’m super happy and life is awesome. Most entrepreneurs do not sign up to that kind of mentality. But the buyback loop will always be part of your life. And essentially, once you feel like you’re at capacity, I probably do it every four months just because I’m adding, I’m adding, I’m adding, and I’m trying to buy back my time. Every four months, I do what’s called time and energy audit. So the time and energy audit at a high level is auditing your calendar for two weeks, highlighting things in red that suck your energy, highlighting in green things that light you up, and then using a one to four dollar sign annotation to tell yourself if it’s inexpensive to pay somebody else to do versus expensive.
Once I do that audit, then I put all the things that are red in one dollar sign in a bucket and I try to find somebody else to do it. If I don’t have any $1 signs, it’s only two dollar signs, then I take all the reds that are two dollar signs and find somebody else to do it. It usually correlates to the replacement ladder. But at the end of the day, once you have that list, then you have to figure out how to transfer it. And this is where I talk about the four Cs in the book. But one of my, I think, strategies that are unique, that most people work really hard on, is getting other people to be trained up and create systems and, what people call SOPs, I call them playbooks. But in my world, I use this thing called the camcorder method. I literally record myself doing the work while I’m doing the work so it takes me no extra time. I call it net time.
And then when I’m ready to hire somebody to do the work, I’ve got three to five videos of me doing it and talking about it, that I then give to them, and that becomes the first week of onboarding. So if I’m hiring somebody to manage my inbox, I literally have maybe five videos, 90 minutes each of me starting at three o’clock in the afternoon and going through my inbox and just talking out loud. People don’t realize simple things like, if you email me, Rob, I’m going to grab that email and I’m going to let the person know, “Hey search my inbox to see if we have context.” Okay, you’re going to see these emails, I’ve known Rob for a really long time, then move that conversation forward. You don’t need to ask me. If the person has a history with me, schedule the call.
So you start talking out loud, all these things. So then when you hire that person, they spend the first week training on those videos, they create the SOP. So that’s what’s very unique about me. I give them a template, it’s very simple structure, but then they create the process that they saw in the videos, and it creates a feedback loop for me as the hiring person, to know that they understood what I was asking them to do. And then if for whatever reason, in six weeks, two months, three months, it doesn’t work out with them, I now have training and now a playbook that the next person could follow. See, most people will hold on to somebody that’s an under performer, or not hire because they’re fearful of the amount of time it’s going to take to get them up to speed, and that they’re going to have to take out of their calendar.
It actually creates this compounding effect where it’s like, I don’t have the time to train them but I don’t have the time to do the work. So then you start cherry picking the most useful stuff, but at the end of the day, you just need to take the whole thing, get it off your plate. That’s transfer. And then the last one is fill, and this is where most people get it wrong. Let’s say I gave somebody an extra weekend or an extra day in their week, most people wouldn’t know what to do with it. It’s like, by wave of a magic wand, you now have Friday open, what are you doing on Friday? Well, they’d probably get caught up in stuff and sharpen the song, clean up some systems or whatever. But the truth is, you want to fill your time up with things that are going to propel your business forward.
And there’s only three buckets of those things. Number one is skills. I kind of consider a ladder, so on the left side of the ladder, the first part is skills. Every entrepreneur has to develop skills. And when I say skills, I also mean strategies or solving problems. So it might be like, how do I get more leads? How do I improve my sales process? How do I improve my product development process? How do I increase, decrease my churn? Those are skills that you have to acquire. On the right side of the ladder, the second area to invest time in, is in beliefs. For me, I know if I want to achieve a higher level of success, I ask myself, “Who do I need to become?” Who I am today is not the person because if it was, then I’d have that result in my life. It’s very simple.
So then the question is, how do I develop those beliefs? A lot of people don’t audit themselves. They don’t meditate, they don’t journal, they don’t have somebody they talk to, they don’t have a coach, they don’t have people in their lives that they can challenge their beliefs, and they just keep going through the same motion. At the end of the day, there’s no lack of knowing how to do something. It’s free on YouTube, it’s Google, everything’s there. What stops people is the belief, the confidence, the tenacity, the lens to look at the activity to actually drive that change forward. And then the center of the ladder, the steps, those are character values. That’s who you become. I’m always telling people, “You need to fill up your calendar once you free it up in the next level of area.” So if you don’t have a clear direction where you’re going, what that looks like, to then work backwards to say “Okay, I need to develop this skill, this belief set.”
Some people, it’s just learning to let go, control. A lot of the concepts in the book, and that’s why I put a ton of belief stuff in there. I know that it’s a personal challenge of letting go, right? Because they’re going to be like, “What if they mess up? What if they reply to somebody and they say the wrong thing?” It’s like, my rule, and I talk about this often, is 80% done by somebody else is a hundred percent freaking awesome. Any hour of activity that somebody else did on my behalf that I don’t have to do, even if they did at 80%, which means they will make mistakes, I am so okay with that. I am grateful for that, I am thankful that that happened, so that I didn’t have to do it. And it’s just so funny how people can be so critical about stuff that they don’t want to do.
It’s like, why are you so critical about it? Again, beliefs and activities in your character, who do you become? So that’s what the audit transfer fill process is, and it never stops, right? And it’s like skills, invest in seminars, training, reading, developing, just making it part of the process. Because every person out there that you admire as a entrepreneur, this is what they do. They may not have a framework for it, but I guarantee if you ask them, how have you grown into the CEO that runs this multi a hundred million dollar company? They’re going to tell you a story that sounds very similar to this process.

Rob Walling:
Yeah, the evolution, the smartest people, the most successful people that I know, the people that I admire, I’ll be honest, they’re constantly evolving. They’re so different than they were a decade ago. And myself included, not that I’m admiring myself, but I’m just very different. And I wasn’t ready to have success until I had a bunch of my, well you’re calling them beliefs, I always think of it as mindset shifts though. And it’s the ability to say, “I can do this.” For me, it was a self-confidence thing that I had to work through. I really like what you said about inability to let go. A belief that I’m the only one that can do it, right? The one that can do it best. You talk specifically about two objections, and why they are incorrect. And one is, no one does it right, and the other one is, I can’t afford it.
And the reason I bring these up is because I especially fell into the trap of the second one, when I was bootstrapping Drip. I was doing all the stuff you described it earlier, we were at 10 employees, I was doing all the crap that I didn’t want to bother anyone else with, I was doing the worst jobs, I didn’t like it, started to burn out. And my excuse at the time, my reason at the time was, well we’re bootstrapped, and if I make another 10 grand a month, I got to hire a developer because it’s super competitive. I can’t afford to do this. So talk us through why no one does it right, and I can’t afford it are essentially fallacies that we make up.

Dan Martell:
Yeah, the truth is… And Steve Jobs said this, he said “It’s easy to hire somebody and tell them what to do. It’s hard to hire somebody and have them tell you what to do.” If your experience today with hiring people is that they don’t do it right, then I know the problem, he’s staring at you in the mirror, and you have to confront that. The skillset, like I said, skills of being able to identify and hire great people that play at the things you work at is a skill. I consider myself world class at this skill. And I had to become that because there’s only a certain level of aspiration you can have in regards to the impact you want to I have on the world, that you can do by yourself. At a certain point, it’s like okay, if I want to do more, it requires higher talent, higher caliber people.
And that is a skillset. I actually talk about it in the book, in the talent pipeline framework as an example. If you’re not doing a test project with somebody that you hire to evaluate, Seth Gooden said this to me once. He says “I can’t work with you unless I work with you.” Again, that’s a strategy, that’s a skill that’s around hiring great people. But somebody that comes in that can not only play at the things you work at, it’s the most beautiful things. My bookkeeping team and finance team, they nerd out on spreadsheets, Rob. It would drain me if I had to sit there and pivot tables and analysis and all this stuff and reconciling bank accounts and all this is crazy. But it’s almost like, for them, it’s a game. They wake up in the morning to click all the accounts and they do their thing and they tag stuff and they’re happy.
That’s their happy place. So that’s one thing. And then on the afford side, that mindset, the truth is that, first off, if you don’t have an executive assistant, you actually do have one. It’s you, and you are an incredibly expensive one. That’s just a fact. At the end of the day, when people understand the value of their time, and that’s where I start the book at with this concept called the buyback rate, because you need to understand that you’ve built a business that creates an economic outcome, and you work, so that means essentially, you have a income per hour that you produce based on your current business, and then the only way to increase that capacity is for the business to grow, and you to work less so that… It’s not linear, right? Because you can only work 120 some hours a week until you burn yourself out.
I want you to get better so that a 30 hour, 40 hour week has a disproportionate output. But that’s only going to happen if you hire people to buy back the time to have the space to develop the skills that are more meaningful. Jim Rohn, this OG motivational guy back in the day, he’s like, “Your compensations based on the value the market decides.” The highest paid CEO in the world today makes a hundred million a year. His name is Tim Cook. The reason why the board and everybody in the world has no problem paying Tim Cook a hundred million dollars a year as a CEO is because he made a trillion dollars for the organization. There is levels to your ability to produce a higher level of income, which increases your buyback rate, which means you can hire more people. The problem is, I think what you experience, Rob, is the same thing. Is people hire expensive folks because they’re adding capacity, and they’re not buying back their time.
Now, the cool part is, if you follow the replacement ladder, you can get to a place where you’re adding capacity. And most of the time, when you’re buying back your time, you’re actually increasing the business capacity. You’re just doing higher caliber work. I want to free up myself from doing administrative work so I can go lead my teams, so I can work on product and work on customer success, not answer support tickets. I can pay somebody else to do that and train them up. I want to build the machine that builds the machine. I want to work on strategy and systems. Like you said, that’s repeatable, scalable. And the more I do that, then the more efficient the whole thing becomes, then the income goes up, which means my buyback rate goes up.
It’s a very simple mathematical equation. And that’s literally my scorecard. Every year, I’m like, did I become better? Because if I became better, then that means my income went up and the hours I worked to produce that income should have a higher rate. And if it didn’t, that means that maybe this year was a push. I can learn, adjust how I’m filling up my calendar for next year, and then work through the same buyback loop so that I’m more effective.

Rob Walling:
And as we wrap up, I want to ask you about one more thing. It caught my eye. Towards the end of the book, you have a chapter where you cover four hacks, and we won’t have time to cover them all today. But you have one called 1-3-1. It happens when someone comes to you, a team member comes to you with a problem, and I think the 1-3-1 helps define that and tighten it up. Talk us through that.

Dan Martell:
In the book, I realize, as I was writing it, I needed to add some leadership frameworks because if you just hire a bunch of people and you still show up as this chaotic, crazy CEO, which all CEOs are crazy, being an entrepreneur is a crazy concept, it’s not normal. I had to give them the antidote to their venom, a little bit. And one of them is, they have this desire to just tell people what to do. And I get it because it’s like, I see the problem, I know how to solve it, you’ve never solved it. I’ve done this a hundred times, go do this. Challenge is, we’re not developing our people. And the 1-3-1 rule is a core principle, and it’s part of our culture. In all my companies, I literally, it’s shorthand, we use it all the time. What’s your 1-3-1? And it’s essentially asking the person to come to you, and first off, describe one specific problem you’re talking about.
Because oftentimes, people come to you and they talk in circles. I usually politely ask somebody to stop and say, “What is the problem you’re trying to solve?” And then they define it. Then I ask them “What are the three options they evaluated?” At that point, usually a person says, “I don’t know.” And then it’s like, “Cool, do you need more time to go do some research to come to me with three viable options?” And they’re like, “Yeah, I’m probably going to need some time.” “Perfect. Want to meet tomorrow, same time?” “Yeah, tomorrow works perfect.” “Great, I’ll see you tomorrow.” And then they come back with those options. I had Adam, my head of recruiting, came to me a long time ago and he was like, “We got to hire 12 people this quarter.” And I was like, “Yeah.” He’s like, “Well how are we going to do that?”
And I was like, “I don’t know, but I think your title is head of HR and people so you’re going to tell me.” And he’s like, “But I’ve never done this before.” I go, “That’s okay. You want to see my to-do list? A bunch of stuff I’ve never done before.” But then I was just joking with him because he knew where I was going. But I wanted him to understand, I’m not here to do your job. And I think a lot of people might have a hard time with that, but that’s just the truth. It’s like, look, if I have to do everybody’s job, I’m going to be the bottleneck. I don’t want to be the bottleneck. So I just said, “Look, can you take some time, do some research and come back?” He didn’t even come back. He texted me and he’s like, “I got it.”
I’m like, “I knew you got it.” So the three viable options as the CEO is actually there because, most of the time, Rob, we just want to know the person thought through things the way we would, right? That’s it. We actually know that they have the answer, but even if they gave us the answer without telling us the three options, then we would ask them, “Well did you consider this and did you consider this?” It’s not that we don’t trust them, it’s just, because that’s how we do it. We literally running scenario planning in our head all the time. It’s like, well if this happens, this and this. I’m going to go with this option because of these reasons. And then the last one, so that’s one specific problem, three viable option. Then the one is their recommendation. 90% of the time, it’s like, yep, that sounds great. Do that.
And why this is so powerful is it pushes all the decision and problem-solving to the front line. And if you don’t teach this to your leaders, people that report to you, then you’re going to inadvertently teach them how to do… And I talk about this more in the book, transactional management. You’ll teach them how to do transactional management and then they’ll bottleneck. So it’s actually a learned strategy that’s negative that’ll stop you from growing because you taught your leaders that process. Whereas the 1-3-1 rule creates this uncapped opportunity because everybody’s coming to you. Here’s a problem I saw, here are my three options I looked at, and this is the one I’m recommending. And the person can go, “Oh, well consider this, tweak this. But I think you nailed it. Perfect.” And eventually, you essentially develop people to the point where they don’t even need to come to you unless it’s really big, and the business moves forward so much faster.

Rob Walling:
Buybackyourtime.com folks, want to check out the book. As I said, it was released today. And if folks want to keep up with you on Twitter, you are @danmartell. Thanks so much for joining me, man.

Dan Martell:
My pleasure, Rob, thanks so much.

Rob Walling:
Thanks again to Dan for coming on the show again, byebackyourtime.com if you are interested in learning more about the book and ordering a copy. Thanks again for joining me this week. I hope you enjoy the variety of episodes I’m trying to bring you. Today was an interview with a startup founder who is now an author. Last week was Listener Questions with Derek Reimer. Week before was about no code. The week before was solo listener questions. I’m trying to really mix it up, keep a lot of variety of material coming your way in different formats, because I know some people love certain episode formats, but I like to bring information, new information from outside our little bubble.
I could just have all MicroConf people come on this podcast and we would start to say and think the same things and it becomes a little too homogeneous for my taste. And so I’m trying to A, bring in outside perspectives, but also, looking at the same topics from different viewpoints, right? And different perspective in order to try to fully flesh out our understanding. And hopefully we all learn something along the way. Thanks for joining me this and every week, this is Rob Walling, signing off from episode 644.