This article was written by Noah Kagan, the Chief Sumo at AppSumo.com (#1 ecommerce site for entrepreneurs). He was employee #4 at Mint.com and employee #30 at Facebook.
A few weeks ago I had wine with some very successful entrepreneurs. How successful? On their best days they were generating $100,000 a DAY in revenue. That’s $36,500,000 a year.
But what was the most surprising thing to me was that they were STILL doing their own data entry and dealing with small clients.
Holy crap. Think of it this way:
Let’s calculate their hourly sales:
$100,000 / 8 hours a day = $12,500
Divided by 2 guys = $6,250 / per hour
Do you see where I am about go with this? :)
After spitting out my wine, I started berating them with hate words about how dumb they are and why aren’t they focusing on higher-value things for their business?
“We want to make sure it gets done right.”
Ahh, now it makes sense. They have Jewish mothers and are control freaks. (disclaimer: I'm proud to also have a Jewish mother.)
This is something I had a problem with myself, once upon a time: We want to do everything ourselves, which means we aren’t focusing on the highest-value things we can be doing for our business.
I used to do the same kind of data entry. I’d write up the emails for AppSumo.com, do customer support emails (which I actually like, most of the time), and other low-level things.
It all changed when my buddy Joe from MyChurch opened me up to outsourcing.
“Come on, Joe. Those people are crappy and it’s so weird,” I said.
He finally convinced me, so I had Nimesh Mehta at $4 / hour start aggregating certain data from me.
It wasn’t about outsourcing to India. It WAS about maximizing the best use of my time.
As an example: what do you think is a better use of my hour?
1. Writing this article that hopefully gets 500+ people to discover and check out AppSumo.com, or
2. Doing data entry to put a new deal in our system.
Take a guess.
Writing this article, of course! It generates way more value which is a way more ROI / value / monetizable use of my time.
Coming back to how you can save yourself before it’s too late:
- Start small. When hiring other people to do your tasks, you need to be concise in your instructions. Delegating is a skill (not a talent) gained from experience.
- Think investment. Don’t think of outsourcing as a cost. I LOVE hiring for AppSumo!
- Guard your time. Next time you think about doing something, think if you are REALLY adding value (i.e. only your special skills can do it) or if someone whose value of time is lower could handle the task instead, thereby freeing you up for better things.
That's fine and all, you might be thinking, but aren't there some seemingly trivial tasks that keep me closer to the business? Like customer support-- how do you find the right balance between outsourcing/delegating and maintaining the little things that make the business differentiated and special?
Trivial tasks will never go away. Invest in the things that matter. Wow, I can throw a few more cliches just to finish off the article nicely.
Look, if support is going to be a differentiater like we want it to be at AppSumo then we don’t try to pass off phone support, live-chat, email, etc. to a lower wage person. But processing refunds, merging email accounts and helping the customers get what they want can be passed off.
I guess the ultimate balance comes from identifying what is important to you. I still like updating Excel each month with my finances vs. using Mint.com (which I helped build). Doesn’t make it the “right” choice, but it makes me happy.
A helpful tip to see how you can start evaluating what you want to delegate is to literally write out your entire day by tasks. I did this with Andrew Warner from Mixergy.com too and it seemed really helpful. Then pick out the things that are high-value or you personally get value from doing. Keep those. The rest of the stuff, get someone else :)
What do you think? Have you identified the key areas to apply your time and energy, and shifted the rest? What's working for you?