What if I told you that building a billion dollar company from zero has nothing to do with working harder and everything to do with building better systems? I went from working at Subway to being the CEO of a $500 million portfolio and I have learned that there is a reason that 99% people stay stuck and it is not lack of effort. The third system is the people flywheel. And this is why at some point you need to learn this because you realize

you can't do everything. This is a mistake that a lot of founders make. They think, oh my God, I'm so overwhelmed wanting to hire somebody. And so for like 60 days after you've hired somebody, you have this like very euphoric, very fake relief. But then this person you've hired starts to ask you questions. They start slacky, they start asking you, they start asking you more questions. then they started duplicating your work,

and then they don't know who owns what,

and then you don't know who owns what,

you don't know who owns what. And then you don't know

who owns what. You don't know what clear and what they do versus the other person. And then you have to realize that they don't actually make decisions value. And then six months later, you have more people, but you have the same capacity. And you haven't grown. You're like, why did I hire these people? Because I thought if I hired 10 more people, I'd grow by 10 more.

And it's like, no. You hired a person into a system that either sucked or didn't exist. A lot of the times what happens is that people point to the person, they're like, I've got the wrong people. Most of the time is that you didn't build the right system. So, you need three elements in order to scale. Okay, you need functions. This is what work actually needs to happen to make the business work. This is like you would literally list out all the activities that occur in your business. Like some businesses have manufacturing. They have sourcing. Some just have like technology and they have hiring and they have customer delivery. What are all the functions that need to happen to make your business work? Second is you need people. Who are the right people to create the outcomes and the functions? It's an important question to ask. What people can make these functions work? What people can run these functions? And then you need operations. How does information flow between all the functions and people? If any of these three pieces is weak, then you end up filling in the gap and holding it all together. So you have to ask yourself, is it a functions issue, a people issue, or an operations issue? They are different issues. Most people point to person and they say it's the person. But oftentimes, the person is the symptom and they are the last piece in the puzzle. So again, what I told you earlier, you got to go upstream. Upstream, there's operations, there's functions, there's, did you select the right people for those functions? Ask yourself these questions before you point to the person and say they stop. Next piece is that people look at the people and most people hire in people and they want them at a level five accountability, which is essentially like they want them to come in, take complete ownership, act independently, make decisions. And I would say that 99.999% founders don't actually hire those people, but they say they want them. They hire people at a level two who need to be told what to do because most founders don't want to pay for a level five. Because if I told you how much they cost, you'd be like, I don't even make that much. I know. That's why you usually have to wait until you're a server boy in the company. But what happens is they hire level two's. They don't train them to be a level even three or four, let alone five. And then they stay stuck doing 10 or 20 percent of that person's job indefinitely. And so your job, you become a bucket of all the 10 and 20% of other people and you just do all that. You're essentially like the junk drawer. That's what you are. You're the junk drawer for your business. You do a little bit of everything and nobody exactly knows what's going on there. We can fix this what I call the accountability dial. So the accountability dial essentially you hire somebody who's at a level one, which means they really just need to be told what to do. They can't even get started without

being told what to do. There's hiring people at a level two where it's like level two accountability is

like they can do some tasks, but they can't make decisions or follow things through without input.

Level three is you hire people and they can do tasks and come and get feedback from you before they finish it. Level four is like they can do tasks and make decisions and then they get feedback from you after. Level five is where they can do tasks, make decisions and don't even need to loop you in. And so what happens a lot of times when you bring someone at level two, but you really want a level four and then you just want them to change. Instead, we want to train somebody up. So I'll tell you what I do. If I hire somebody who's a level two, how do I move them up the dial? Easiest thing in the world is you have to prompt practice. So I can explain to an employee all day. This is how you make this decision. This is how you do it. Unless I give them the opportunity to practice, they will never learn. People don't learn by hearing an explanation. They learn by trying. So you have to prompt attempts. You have to prompt them to try. And so, for example, I had an executive assistant, and I remember I used what I called the Q&A framework with her, which was every time you have a question for me, what I would like you to do is bring to me the answer that you think I will give you, and I will tell you if it's right or wrong. And so we did that for a while, and this was because I wanted her to make more financial decisions. I didn't want her to ask me where to spend money or not spend money, especially if I was on requesting that she go do something with my money. And after I would say about two weeks of her doing it, she was able to make decisions that me as the CEO of the company was only able to make at that point. Because she'd used the Q&A framework with me, which what was that framework doing? He was teaching her to get the answer herself and then ask me for feedback before she went to the final. And then finally, I just said, you've gotten it right about 10 times without me. Go do it yourself now. Like, it is that easy. This helps because you can stop being

the command and control CEO and you can start being the architect and you let this flywheel kick in

where people are able to not just do things on your behalf, but decide things and move things forward.

Better systems produce better people. Better people produce things forward. Better systems produce better people.

Better people produce better outcomes. Better outcomes attract better talent. And that is the cycle for compounding a business. Which brings me to system four, the talent engine. Companies that scale the

fastest, they don't hire the most people. They hire the right people. This means that your talent system

has to be as good or probably better than your customer acquisition system. If you think about it, it's like a lot of founders, they spend like 40 hours a week on marketing sales, brand, customer, customer, customer. And they spend like zero hours a week selling talent, getting good talent, improving the team, figuring out how to get more A players. But the bigger the business you want, the more you actually have to reverse that ratio. So I remember at Jim Launch, we were growing 30% month every month, and we were also losing people just as fast as we were growing. So I'd optimize like every single piece of the customer's funnel. Like I knew every email, every meme that got texted to a customer, every single point in the funnel. But my talent funnel was literally just like, I'm just going to post this on Indeed and Craigsless and pray to God that I get somebody good. And that was what I did. And what I learned through this is a few things. One, a player talent is not scrolling on Indeed and Craigless. This was 10 years ago. Don't talk to me. They are being recruited. They are probably choosing between me and five other companies. They probably aren't even on the market. So they can choose where they want to go. So, for example, if my job description that I post on Indeed, which they probably won't even click on, you know, reads like every other job post, marketing manager, needing to manage marketing things, like I have already lost. The companies that scale the fastest do not hire the most people.

They hire the right people and they keep them.

And they're able to do that by building out a true talent funnel.

What I mean by that is you have to start seeing your talent funnel the same way you see your customer funnel.

So it's like you have leads that convert into calls, that convert into customers, that then you onboard. Okay, here you have people who apply,

who then you book interviews with, who then you interview, who then become an employee that you then

onboard. It's the same on both sides. The issue is that you haven't dialed in the talent acquisition

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