During the webinar, Jeff highlighted the results of his many hours of reading, and personal interviews with some of the world’s most successful entrepreneurs. Based on that research, he identified seven common traits of successful people, and shared four of those traits with our audience.

Do you want to discover what you were meant to do in your professional life? You might be surprised to learn how apprenticeship, practice, failure, and diversity will help you make that discovery.

Watch the webinar:

About the book:

“This is one of the most honest, direct, and generous books about you and your life that you will read this year. It took guts to write and it will take guts to read. Leap.” — Seth Godin

In a still-tough job market, an era of rapidly-changing work philosophies, a society that questions the merit of college, a workforce that is increasingly digital and therefore remote… the idea of vocation— of a life’s calling lived out—is more complex now than ever before…

The path described here is not a manual for life. It’s a piece of canvas on which to add your own experience. This isn’t some scientific experiment with predictable results, and it won’t be another self-help program that leaves you feeling passively inspired. It’s the way of master craftsman and artisans, a centuries-old road that requires both perseverance and dedication.

To buy the book, click here. To learn more, visit www.artofworkbook.com

Transcript:

Jonathan: Thanks for joining us for The Art of Work, with Jeff Goins. Jeff is a full-time write who lives just outside of Nashville, Tennessee with his wife, son, and Border Collie. Jeff is the author of The Art of Work, but he has written three other books: The In-Between, Wrecked, and You Are a Writer. His web site, Goins Writer has been visited by more than four million people from all over the world, and Jeff’s book, The Art of Work, has been highly praised by such business gurus as Michael Hyatt, Seth Godin, so I think you guys are really in for a treat here with the content that Jeff is going to be presenting to you today. With that, I’m going to welcome Jeff. Thank you for joining us, and I will let you take it away.

Jeff Goins: I’ll just give you the highlights of some of the takeaways that I learned from the years of research of living, and writing this book. First, I want to say thanks to Jonathan, and the whole Bplans team for having me on. It’s an honor to be with you guys. I know that you don’t just let anyone talk to your audience, and so I will hopefully honor that, and try to make good use of everybody’s time.

I am Jeff Goins, this is me. I wrote a book called, The Art of Work that came out a few months ago, and became an instant national bestseller. Really, it is the answer to the question that I have heard over the past several years, friends of mine asking me, basically, how did you do this? How did you become a full-time writer? I made a transition from working a day job, to starting an online business, then we started to double, and triple our income every year, really got to design the life that my wife and I, and members of our family wanted to live.

Naturally people were asking me, how did all this happen, and I started to write this book as an answer to that question, but through the process it became so much more than that. It really became a series of case studies of people who have historically, not just succeeded, but lived a good life, done something interesting and remarkable, and left their mark on the world, which is something that I want to do with my life. It also became a contemporary study of people who are doing that right now, along with some lessons about … Those of us who want to do meaningful work in the world, how we can do more of that today. That’s what the book is about, and today you’re going to get some of the best takeaways that I got through that experience that we can pack into the next 30-40 minutes.

Before I do, I want to ask you a question, and Jonathan, feel free to chime in here. I love to start every webinar that I do, every talk or presentation with a question. I’ve got a couple of questions for you. The first question, just because it’s great to know where people are at is, what’s your biggest business struggle right now, what’s the thing that you’re troubled with, that you’re trying to figure out some problem that you’re facing, or a conflict that you’re avoiding, or just some issue that you’re having, whether it’s personal, in terms of personal development, a skill that you’re trying to grow in, inter-relational, or even organizational? What’s something that you’re struggling with?

If you wouldn’t mind, go ahead and enter that into the chat right now. Would love to hear where you guys are at, what you’re struggling with right now, and we’re going to do our best to try to answer some of those questions throughout the course of this presentation. I’d love to hear from you, Jonathan, what are people saying. I’m sorry; my Siri just went crazy on me. What are people saying? What are people struggling with?

Jonathan: Yeah, absolutely. Thanks for the question, Jeff. Caroline popped in. She said that her biggest struggle is prioritizing and following through on what she has to do. [Seren 00:07:18] said, networking and branding. Karen joined in and mentioned that her biggest struggle is marketing her business. Jamal had a similar situation, promotional opportunities with not much time to prepare his web site.

Ken [Cavanaugh 00:07:35] jumped in with an answer saying that his biggest struggle is getting clients. [Abenum 00:07:42] said, moving from concept to realization of my business. We have a lot of other great answers, like, work/life balance, start while working full-time so that that transition between moving into owning your own business while also working a full-time job. There’s the fear of getting started, focusing; a lot of struggling just with that time balance, and having a plan to use to get into that. Yeah, that’s the general gist of it, but lots of great responses.

Jeff Goins: Those are great, thanks for sharing that. Okay, one more question, and I’d love just a few thoughts on that, or even really just to think about it, we don’t necessarily have to answer, but I want you to be thinking about this, this next question. What does success mean to you? Those are your struggles; marketing, networking, getting started, focusing. Actually, I can relate to all of those struggles. As a writer, as an entrepreneur, as a marketer, I get all of that.

Now, my second question is, what does success look like to you? What does that mean? I don’t want you to just come out and answer that. I want you to really think about that. Is that a dollar amount per year? Is it some big breakthrough? What does it look like? I want you to just hang on to that question, because the reality is most people that I talk to, and frankly including myself much of the time, we don’t know the answer to this question, and so we’re frustrated, we’re struggling, we’re distracted, we feel like we’re failing. Yet we don’t actually know what the goal is. We don’t know what the finish line is, what we’re actually racing towards.

This is how I felt, especially so several years ago, when I was working a job that I liked, that I was good at, that was a good job, but I didn’t love it. I wasn’t sure that this was where I wanted to spend the next 10 years of my life. I was a marketing director at a nonprofit that [inaudible 00:09:48] and I was doing good work. Imagining what I was hoping to do with my life, yet deep down inside I didn’t really know who I was.

I read this quote by a guy named Parker Palmer, who is an author and an activist. He said, “Before I can tell my life what I want to do with it, I must listen to my life telling me who I am.” That really struck me, it resonated with me. Because here I was achieving things, I was continuing to get promoted and get raises at this nonprofit that I was working at. I was doing really great work; I was getting recognized for it. Yet there was something inside of me that felt like there is more that I was missing out on.

What it really came down to was this thing that Parker Palmer says, which is that I didn’t know who I was. I maintain that before you can succeed at whatever it is that you’re striving to succeed at, you need to figure out who you are. What that journey looked like for me was it was an introspective, and also actionable journey, where I was looking deep down inside of myself, at 27 years old, and asking myself deep questions. Not just about what I wanted to do for the rest of my life, but who I was, and therefore how I wanted to do it.

It wasn’t just a matter of, “Well, I don’t want to work too much,” or “I want to become financially independent by age 40,” or whatever it might be. It was really a question of values. Who am I? What do I believe? What’s important to me? Ultimately, what matters so that as I chase these dreams, whatever they might be, I do so in a way that feels healthy, and also, so that I get to the end of my life and realize, I succeeded at the right things. Keep thinking about what does success look like for you, because one of the goals of this webinar is to help you reframe what that means to you, and also help you understand where you’re at in your journey. Before we get into that, I just want to give you a little more background on me, and what these past several years have looked like for me.

Over the course of about two years, once I started thinking about who I am, what I wanted to do, I started listening to my life. I realized that my life was telling me that I was supposed to be a writer. You might be wondering; what does it mean to listen to your life? Well, for me that just meant looking at the things that I loved, looking at the things that I was good at, and the thing that … When I did these things, whatever they might be they produced results. I was filling some need in the world, and as I did that there was resonance, there was a sense of purpose.

I realized that writing was one of those things that I had always done but never taken that seriously. For me, there was this realization, “I think I need to be writing more.” As a marketing director, obviously working with copy, and messaging was a part of that, but it wasn’t the main part. Over the course of two years, I ended up becoming an author. I published a book. Built an online business, that first helped me replace my wife’s income, but ultimately helped me replace my own income, and then we ended up doubling and tripling that income, all over the course of just a year.

Then that led to my quitting my job, which was unexpected. It wasn’t something that I was anticipating doing. By the way, this isn’t a webinar about how to quit your job. Some of you have great jobs; some of you are running your own businesses already. This is just a laying out the path of my … What it took for me to find my purpose, and how I’ve seen those same trends pop up in many other people’s lives, and hopefully some takeaways for you.

As I mentioned before, people ask me this question even to this day. How did all this happen? How did you actually do that? I think that’s not exactly the right question, because the way that I do it isn’t necessarily the way that you’re going to do it, or even the way that you should it. I think that in some ways “Success,” which I will put air quotes around, because it means something different to everybody. Success is subjective, and what it takes for you to get to where you want to go is not necessarily the same thing that it took me, or that it’ll take your friend, or a next door neighbor, or whatever.

I do think that in every story of success there are principles that we can apply. We can glean from other people’s stories and apply them to our own lives. The promise that I want to make to you for this presentation is quite simply this. If you do the work you will see the results. It’s a basic sowing and reaping principle. I grew up in a farm town in Northern Illinois, surrounded by corn fields; I lived on people who lived by this principle.

Work really, really hard, and then trust the process. Farmers would go out during planting season, and they would plant a bunch of seeds. They would pray that it rains, and then when the rain comes they would expect to have a crop. Unless something catastrophic happened, that almost always happened. That was an act, right. Planting a seed is an act of faith, because you’re not completely in control of the process, but what you can control you need to work really, really hard at. That tends to yield results. I think that’s like the most honest promise that I could give you.

I could say, follow these seven tips, or do these four things and you will be amazingly incredibly successful. I just don’t think that honors your situation. What I do believe after studying biography after biography, interviewing hundreds of people who found their life’s work, who are living their calling, and then going through the experience myself, I can promise that I think this stuff works. These principles are true. They’re true in my life, they’re true in other people’s lives, and I believe they’ll be true in your life too.

Your process will look a little bit different, but these principles will remain true. That my promise is if you do the work you’ll see the results. With that, third caveat; I want to get into the meat of what we’re going to talk about here. Well, we’re going to dive into four secrets, four principles for success. Remember there are actual quotes now, not just air quotes around them, around what it means to succeed, because again, remember what success means to you. As we go through this you could be thinking about how these principles can apply to your journey.

At the end I’m going to try to flip some of this on its head. For some of you it may mean that the thing you’re chasing isn’t actually what you’re about. You’re asking yourself what should I do and not thinking too much about who am I. I believe that’s a purpose-filled successful life, where you end up succeeding at the right things is really a marriage between understanding who you are, and then doing what you were meant to do, and those things are inseparable.

I want to share with you four simple secrets that come from my book, The Art of Work, that I learned through this process of writing this book, interviewing people that really illuminate my own journey, where I realized, wow, I was going through this and I didn’t even quite realize this. Then I hope it helps illuminate where you are in your process of figuring out your purpose, and finding meaningful work that you’re meant to do.

The first secret is apprenticeship. That’s an old fashioned word, so I’ll clarify what I mean by that. Apprenticeship is the process, usually a formal process of undergoing an education from a teacher, in which you learn a practical skill through firsthand experience. Compare that to an internship where typically, not always, but typically you’re fetching coffee or doughnuts for somebody in an office, and you’re not actually getting to do the things that you’re trying to learn. At best you’re watching somebody do it. At worst you’re doing something that isn’t even relevant, which is the sad reality for a lot of, especially college students who [enter 00:18:19] multiple internships.

Contrast that even with a formal education, where you’re reading all these books, you’re listening to all this information, but you’re not actually getting to do it. One of the secrets of success for finding your calling was that people who discovered what they were meant to do, who are living out their life’s work right now, they underwent an informal, what I call an accidental apprenticeship. Let me unpack what that looks like for you.

In any journey of success you need to ask yourself the question, who could help me in this process. I don’t believe in the myth of the self-made man or woman that you are who you are, and you can achieve what you can achieve really because you believed it hard enough, and you pulled yourself up by your bootstraps to get there. I’m a fan of hard work. The reality is we all are interdependent on each other. We rely on communities of people that help us get to where we want to go.

I believe that that’s true for me. I would be surprised if it wasn’t true for you. A lot of times we tell ourselves a story that I got to where I wanted to get all by myself, but when we go back and honestly remember, this thing led to that thing led to that thing; there was always someone. Often it was many someones who helped us get to where we are today. When you’re thinking about who can help my advice is to stop looking for the perfect mentor.

This was a disappointing experience for me for many, many years, trying to find some mentor, some older man who had been where I had been, who had done what I wanted to do, and to take me under his wing, and we get together for coffee every week on Wednesday morning, and talk about life, and he would tell me what to do. I went through many, many years of trying to find this right person, and failing before I realized that some … There is no such thing as a perfect mentor, or at best these people are very rare.

The better thing to do is, instead of looking for a perfect mentor, start recognizing the one, or the ones that are already there that are already a part of your life. That’s basically what an accidental apprenticeship is. It is looking around at the people in your life, pulling them together in an intentional way, where you create a multitude of mentors whom you can learn from so that you can learn the skills, and acquire the knowledge that you need to succeed in your filed. I like referring to this as the Steve Jobs strategy.

If you are familiar with Steve Jobs, the late founder of Apple Computer, co-founder was Steve Wozniak, that if you’re familiar with this story then you know that he went to college for a brief period of time. He went to Reed College. Unlike Bill Gates who dropped out of college, or unlike Mark Zuckerberg, who left Harvard to go start this company, Steve couldn’t afford to stay in college. He dropped out because he just couldn’t afford to stay there, and wasn’t completely interest in college.

He drops out, but instead of going back home in defeat, he basically moves around from dorm room to dorm room, sleeping on his friends floors, auditing classes that interested him. One of those classes was a calligraphy class that he credited for being the inspiration for all of the beautify typography on the first Mackintosh, and basically ever Apple product to come. Then from there he goes and works at Atari, really based on his relationship with Steve Wozniak, and taking some of Woz’s work, and passing it off on his own and getting that job.

Then he goes to India, and he gets exposed to a whole different world. All of these different random things become very influential in the work that Steve is going to do later. An accidental apprenticeship works like that. Where you are going through life, and it feels chaotic, it feels like all these random things are happening. There is no real sense of rhyme or reason to it. The difference between just a lifetime of wandering, and this season of accidentally wondering around and colleting all these experiences is intentionality.

What Jobs was doing, even though he didn’t quite understand where he was headed or what his goal was, he was intentionally collecting relationships, leveraging experiences in people that he knew to get him to where he wanted to be. I argue that I think you can do the same thing. Instead of waiting for some perfect person to come and pick you, and tell you that they’re going to be your teacher, they’re going to tell you everything that you need to know about your industry, about your field, about your craft. You need to be looking around to the people available to you right now, and asking yourself, who can I learn from right now? What relationships are available to me that I could utilize, and make the most of to get me to the next stage in my career or my business?

Now, you probably heard, it’s not what you know it’s who you know, or it’s who knows you. I don’t think either of those are completely true. It’s not just who you know in terms of succeeding in networking. This was a question one of you had. I think that networking is great, but really what’s better is to become an apprentice, become a student of other peoples’ work. Humble yourself by learning from other peoples’ experiences and stories, and you will endear yourself to them. If you do this the right way you will begin to build a network of people who are on your team, who are on your side who want you to succeed.

I think this is a crucial element of success that most people tend to overlook, because they think their journey is an individual one, instead of a communal one. I think it’s not who you know, but really who you help. One of the best ways to build a network of people is to make a list of people that you want to connect with right now, and find a way to, not just get in front of them or connect with them, but find a way to immediately help them. To do something small, but significant, that adds value to whatever they’re doing.

That could be buying a product that their company sells, introducing them to somebody who can help them. It could be something as simple as tweeting a link to their blog. I think that in the long run the more you give the more you’re going to get. In terms of building a network, apprenticing under people, it’s really the process of not just knowing people, but helping people.

That was the first secret. The second secret is “Practice.” My perspective on practice is it’s not just enough to practice, but you need to do immersive practice. What Daniel Coyle, the author of, The Talent Code, calls a “Deep practice,” I think of it as painful practice because it’s a little bit uncomfortable. In order for you to become great at something you really have to push the limits of your ability.

I think greatness is an essential characteristic of success. That people who really succeed, who leave their mark on the world are doing something that not everybody else is doing. In order to get to that point you have to practice. The question is how do I get good? How do I actually do this? Whether you think your craft is entrepreneurship, or in my case, it’s writing and communication, maybe it’s sales, maybe it’s making whatever widget that you make. Whatever it is, you need to be great at this. If you’re going to leave your mark you need to practice.

I think a lot of people think that practice is the thing that you do to get good. I also think that practice is the thing that you do to understand, “do I even want to do this?” If you’re pushing yourself to your utter limits of ability, and you go, “I don’t really like this anymore,” then it’s probably not the thing that you were meant to do, but practice doesn’t make perfect; I think prefect is a myth. Practice does make habits. It does create this repetitive order in your life that creates a rhythm so that you can … It will resonate with you, or it won’t.

I think one of the worst things for us to do is to keep practicing the wrong thing. I think it’s possible for you to succeed at the wrong thing, before you get to the end of your life and you realize, “Man, I tried to have all these goals, and this wasn’t it. This wasn’t the thing that I was supposed to do.” Practice is one of the ways that we not only get great at something, but also we use that practice to discern, is this something that I should be practicing at all in the first place.

Ultimately we want to become great at something. We want to master a skill, but I think it was Dan Pink who said, “Mastery is an asymptote,” which for those of you who aren’t math majors you might have to look that up. Basically, an asymptote is this line that gets … This arced line, this curve that gets closer and closer to an axis, to another line without ever touching it. In other words, there’s no destination. I think that mastery is not necessarily a destination, it’s a habit. It’s something that you get up and do every single day.

For me what that meant, when I was starting to realize, “Okay, I’m supposed to be a writer. What is the next step in the process?” Well, I need to do what writers do, which is get up every day and write. I wasn’t doing that. I was doing it once in a while when I felt like it. If I’m going to be great at it, and this is what I’m going to be known for, the mark that I’m going to leave, I’m going to have to do it every single day. For me, it wasn’t about arriving at a destination, or just being good. It was about getting down to the nitty-gritty and practicing it, which was a daily habit; not some destination.

What does practice look like? Well, I like taking, what I call, the “Pimsleur approach to this.” Paul Pimsleur was a famous linguist, language researcher. He had this theory that, in terms of language learning that has been utilized by millions of people to learn foreign languages quickly, where instead of learning languages the traditional way. Learning a foreign language the traditional way, where you go to school, you read a book, you take tests, you listen to the teacher talk to you; he went back to how do people … How do kids, how do children learn a native language. Well, they learn from hearing their parents talk.

My three-year-old can put together very long, complete complex sentences, and we’re always going, “Man, where did he hear that from,” then we’ll realize days later that it just came out of our mouth; that he’s learning how to talk from hearing his parents talk. The same thing is true for acquiring a new language. The Pimsleur approach is, for 30 minutes a day, listen to a foreign language, and then within 90 days you will become proficient, if not fluent, depending on the difficulty of the language, at that language. That’s the theory, and many, many people have succeeded at doing this.

What I think is interesting, and the takeaway for us in terms of how we practice our crafts is to set aside some time every day, at least 30 minutes, and I think if your passion, getting great at what it is you do, is something that resonates deeply with you. If you’re running a business you might feel like “I’m doing this eight hours a day” but I’m talking about taking the one thing that only you can do, and practicing it. Not just doing it as a routine, but practicing it; doing some deep work that’s going to make you better. I think many of us can go through day, after day, after day just doing busy work.

I submit that nobody’s craft here is checking email. If you’re sitting eight-hours-a-day doing that, that’s not your craft. You’re spending at least 30 minutes a day immersing yourself fully into that activity, learning from it, seeing what other people who are great are doing, and doing that day in and day out. That’s what it takes to practice. It could be something as simple as picking a skill, or a passion, or something new that you want to learn that will allow you to grow personally, or allow you to take your business to the next level, and spend 30 minutes a day practicing that.

I think that a lot of us are wanting to make some big decisions in our lives and in the work that we do, and again, we believe this myth of arrival. One of the surprising discoveries for me about people who discovered their life’s work was that it took a long time. For many of them it took about 10 years. Which is interesting, if you’re familiar with K. Anders Ericsson’s study about deliberate practice, and Malcolm Gladwell’s, we’ve codified this in the 10,000-hour rule, but the basic premise of that idea is that it takes about 10 years to get great at something, practicing several hours a day for year, after year, after year, and at the end of 10 years you’ll get about 10,000 hours of practice in.

Well, a lot of just want to circumvent that, and get to the destination. What was interesting for most of these people who were very successful at what they were doing, both in terms of the personal fulfillment and satisfaction, as well as the fruit of the work that they were doing, it wasn’t a giant leap like we tend to say. It wasn’t, “Man, I took this big leap of faith and everything worked out.” Really, it was a series of small steps, daily practice that got them to where they want to go.

My challenge to you is, as you’re thinking about getting great; about doing something big, don’t believe the myth of the leap. Instead, think about how you could build a bridge. I would suggest that it begins with something as simple as 30 minutes a day. What could you do today to move your business, to move your work, your life to the next level, and could you cut out 30 minutes extra a day to focus deeply on that? Immerse yourself into the process so that you can grow. That’s what it takes to practice.

The third secret, we’ve got two more, and then we’ll open up for questions, is failure. I think that we tend to have a weird relationship with failure, especially entrepreneurs. I’m sure many of you here are acquainted with failure. Yet, if you’re like me you still fear it. I think any time I’m approaching something big and audacious, and it feels right, but it also feels scary, I’m asking myself the question, “But what if it fails? What if I fail? Does that mean I’m a failure?”

I think we grossly misunderstand and underestimate the importance of failure and success. I learned through this process of studying companies, and individuals, and entrepreneurs, people like Walt Disney, and Mother Teresa, and hundreds of people whose names I didn’t know until I started undergoing this study of writing this book, The Art of Work. One of the things I saw again, and again, and again was failure, lots of failure; seasons of failure, years of failure. I realized that failure doesn’t prevent you from success. It’s actually the thing that leads you there.

I think of failure, any time you fail, as a pivot point, as a crossroads. If you’re familiar with basketball you might know this move. At 5’7″ I am familiar with basketball at a distance. I watch it; that’s about it. There’s this move in basketball, called the pivot, where you’re dribbling the court, and dribbling the ball down the court, and you stop, and now you’ve run out of moves, except you can pivot. If you have one foot planted and the other foot free, you can move that other foot in any direction. You can basically do a 360. You can’t move the planted foot, but you can pivot, you can move around in any direction, and then pass the ball.

There is an important business lesson here, that when you’ve run out of options you always have one more option. When you fail, and everything feels like it’s falling apart there’s always something else that you can do, but it requires change. A change of direction on your part to decide, okay, what did I do wrong, what did I misunderstand or underestimate, and how could I take this fail, learn from it, and then use it to succeed.

One of my favorite examples of this in the business world is the story of Groupon. It started as this philanthropic endeavor, where it was a startup, and it was this side project. This student, this business school student basically started it because he wanted to have a way of giving all his friends in the Chicago area to donate their time to some charity or something that they could do, and they would use this web site to use social media, social voting to vote on what activity we were going to do, whether we’re going to go [pin-up 00:35:26] t-shirts, or work at a soup kitchen or whatever; we were going to do good in the world, and we want to get people onboard.

The problem with the model is that it failed. They just couldn’t get it to work. It ended up losing a million dollars in the first year, and they were on the brink of bankruptcy and shutting it down because it just … The model just didn’t work. It wasn’t sustainable, it wasn’t really catching on. Then one of the investors made a suggestion that they actually brought up at the beginning, but at the inception of the business time they threw it down because they didn’t want to do that.

He says, what if we charge money for this. What if instead of giving our time, we get companies to give us a group discount for something, and then we go find a certain number of people to buy that thing, and if we get that number of people then the organization, the company will offer that coupon code. It worked; it worked really, really well. At the time of their IPO, Groupon was valued at $13 billion. That one small tweak, I mean they used all of the technology, all the same resources that they had already invested a million dollars into building, and instead of being a million dollars in the hole, they pointed it, they made a pivot in one direction, at one smaller different direction, and that was a $13 billion decision.

Don’t look at failure as the end. Look at it as an opportunity. You’ve probably heard; failure is not an option. I think that’s ridiculous. Failure happens to us all the time, sometimes every day. Failure is an option. It’s an essential opportunity to success. If you back away every time you fail you’re missing a chance to succeed by embracing what I call a “Pivot.” The question really is, are you afraid of failing, or of not trying? I would encourage you, I would challenge you to reframe your understanding of failure not as the thing that prevents you from success, but really as a means to get you there, as long as you’re flexible and smart enough to pivot when those moments of failure come, and I assure you they will.

Okay, so the last secret in this presentation, in this process. Really, the study of success, again success for me with people who were doing great work, they were doing the thing that they felt like they were meant to do, and they were doing it professionally. They were getting paid to pursue their passion, and there was a lot of variety in that way. Some people did that, some people were very rich. Some people were just making a reasonable living. Everybody, you have to go to bed saying, “Man, I am so glad I get to do what I want to do.”

The reality is most people don’t get that. The Gallup organization released this poll that revealed that 87 percent of the world’s workers are disengaged with their work. They are dissatisfied, they’re not happy. They’re punching the clock, and they’re just going through their work as if it were a rote activity. The last surprise, the last secret in this process was diversity. Allow me to explain that. When I was working on this book, and even now people ask me, okay, you’re writing a book, finding your calling, your purpose, this thing that you are meant to do. Does it have to be just one thing? Do I have to have just one passion? Do I have to have just one thing that I’m meant to do?

The answers to that is, no, no. In fact, I believe that your calling is not just one thing; it’s a few things, but … There is a “But” to that. In order for you to do what you do or in order for you to master your craft you’ve got to do it in a certain way. I think that we’re all aware of the fact that, especially if you’re an entrepreneur, you could be doing everything in your business. You could be doing all these things that you’re capable of doing, but that you know isn’t your highest level of contribution. You need to not be a jack of all trades, but, here’s the catch, you need to be a master of some.

This is what I call, “The new kind of mastery.” It’s really the process of taking a collection of skills, a collection of interests that really resonate with you that you can get great at, that you can practice, that you can move closer and closer to mastery, and combine them in a portfolio that leads to meaningful work. This is what Charles Handy calls, “The Portfolio life.” In his book, The Age of Unreason, he argues that there are different types of work, and the smart person, the smart entrepreneur, the smart worker assimilates that work into, not just one little piece of work, but a body of work; a portfolio.

If you want to see really the breadth of the cause or skill, you need to look at his body of work. You need to see what he did in his blue period, and when he got into [Qbiz 00:40:23]. I mean you need to see the whole breadth of what to understand his skill. The same thing is true for you, and the reality is, the world is making more and more room for this work, and it’s making it harder and harder to be a master of just one trades.

If you want to stay competitive in the global marketplace where there is a study recently in the United States that said that, “By the 2020 over half of the workforce will be freelanced,” meaning they won’t just have one gate, they won’t just have one-day job. They will be doing a bunch of different things. If you want to stay competitive, you need to have a diverse portfolio that is not only the work you do, but the life that you live.

My challenge to you, and I saw this again and again and again in the lives of successful entrepreneurs, people who [inaudible 00:41:11] work, and were doing really interesting things. A great example of that is, Walt Disney, who was a cartoonist, but then when he realized that he was going to be world’s best cartoonist, and he really need to be spending time growing the business, he became a better leader, and then they made all of these different movies. Then he realized what I really want to do is I want to entertain, and so I want to create a park. Throughout his career there are all these little pit wits that allowed him to create this really meaningful master work or portfolio that certainly left a legacy.

The challenge is to find a few skills, not a hundred, a few skills that you can master, and combine them. I think you’ll find is what Robert Greene in his book, Mastery says it’s true that, “The future belongs to those who learn more skills and combine them in creative ways.” Like I said before, your calling your life’s purpose is not just one thing. This didn’t surprised me. I thought it was like one thing that you do, and the reality is it’s not, it’s a few things that you combine in a meaningful portfolio, and that’s that fourth secret of diversity, a variety of having a few things that you do that all complement each other in a way that makes each activity better, so that like I’m a writer, but I’m also a blogger, and a speaker.

These things actually work together well in a way that makes me, like my speaking makes me a better writer, my writer makes me a better speaker. I suggest … I believe that you have the same portfolio available to you. The question is, “Are you tapping into that? Are you realizing it? Are you giving yourself permission doing more than just one thing without doing everything?”

When I go back to that first question, and then will open it for Q&A, I’m happy to answer questions as long as you’ll have me. What does success mean to you? Jackie Robinson has his great quote, “A life is not significant except for its impact on others.” I set out to succeed something, I wanted to be a great writer, I wanted to be successful, I wanted to start a business, and quit my job, and do all these great things, and I was able to do it, like in the process I learned that success is not just what you do, it’s who you impact. It’s the person that you become, and the people that you get to bring along in the journey.

I think that’s the choice that we all have to make that we don’t necessarily need to make, but will have to make one way or the other. Am I going to bring others along on the journey, or am I going to miss these moments. As soon as I learned this the hard way, when I polished my first blog, when I had this breakout year, I had took this successful blog, I started this online business, I’ve made more money than I ever made in my life, ever dreamed I could make. I remember coming home one day feeling pretty good about myself having in the day that my first book published feeling great.

Then, all this back stuff happened like the book is out of stock; there were always problems with the publisher. I didn’t think it was selling, and so I got really frustrated and upset, blaming people. I come home, and I walked into our house, and I’m thinking about all those late nights of fighting with my wife, and trying to finish this manuscript, and my boss I think I’m fearing that he’s questioning whether or not I’ll stick around, and all this stuff. I walk into the door, and I step into a house full of people. My wife had thrown me a surprise party.

Still a little bit fresh air walked over the cupcake table, and I’m about to drown my sorrows and frosting, and I see this card that says, “It’s never been a question of if. It’s always been a matter of when.” I realized in that moment that I was raising towards a goal, I was running towards a finish line, about to complete a marathon, and I was ignoring all the people that had helped me get there. I realized this, that every story of success is really a story of community. It’s a story of impact.

I believe that success is not being great at what you do, it’s about becoming the person that you’re supposed to become. Succeeding at the right things, and those right things depend on your values, your beliefs etcetera, but my caution to you the lesson that I learned through this process, and experience of go into myself, but also interviewing many, many people who had done the same, done so many more significant things is that, in order to truly succeed and lead a satisfied meaningful life, you have to include other people in the process.

You have to learn from those multitude mentors that [inaudible 00:45:54] you’ve got to practice in the company of other people who know how to do what it is like that you need to do. You need to realize that your life and your work are connected. You’re building this portfolio of work that is your life. It’s not just one thing that you do, and really is the person you become, and certainly the legacy that you leave behind. Like I said, we can find out more about all that and you’ve to work, and I think Jonathan and the Bplans people will send you links on that, but that sort of an overview of the book. It’s called the The Art of Work. You can find out more about it at artofworkbook.com, and I love to answer any questions I’d have.

Jonathan: Well, thank you so much, Jeff, for that presentation, and this four secrets to success. That was great. We do have a few questions that I wanted to throw your way. John asks when it comes to the apprenticeship that you suggested and recommended, what do you think? Our younger people less likely to walk that path of the apprenticeship versus the go-to-college, graduate, look for a job pass. What are your thoughts on that?

Jeff Goins: Yes, so first of all I think that our … At least in the United States our education system is in need of an overhaul. College is becoming more and more expensive. My wife and I opened a college savings account for our son, and they estimated that just for him to go to a State University it will cost a $180,000.

Jonathan: Oh, my goodness.

Jeff Goins: No, I think something has to … Yeah, something has to change. The economics of what I think are changing the practicality of it is changing. I have a couple of sisters who recently graduated college, and it’s just frustrating to see how school hasn’t really prepared them for the job market. I think whether or not you go to school, I went to college, and I loved it. It was a great social time, but the things that really prepared me for life and certainly to run a business, and do what I want to do, it was all of those things that looked that works from the main course. It was extracurricular things. It was standing time around a community of people.

For me it was really having a series of mentors. Like I said, I got really frustrated in that. I didn’t have this one mentor. Then when I looked back on my life I realized, all these different people had popped up in my life at just the right time to help me get to where I needed to go. In the times when I recognized the role that person was playing, it was only more fruitful than just, “Oh, hey, thanks. Thanks for helping with that. Now, I’m moving on.”

I think that people will pop up in your life, and your job is just to recognize them. Paulo Coelho has this quote in his book, The Alchemist, where he says basically the universe is conspiring to help you find your purpose. We have to be open to the signs. I annulled a little bit mystical, but I think the practical reality is there’s somebody in your life or in your community, in your proximity right now that is an underutilized resource that you just need to tap into.

For young people, may be that’s a professor then instead of you just sitting in your college, or instead of you just sitting and passively absorbing the information of the teaching, you show up when it’s time for office hours, and take deep and try to learn what they … Try to get some of what they know. I think most of us have more resources available to us that we’ll recognize. For me, one of those resources was my boss. I was working at a job, then I thought, “I’m not going to leave you sometime,” and instead of saying, “Well, this sucks, and I’m just stuck here until I get out.” I used my current context to get me where I wanted to go. To the point that [inaudible 00:49:52] long time and then so excited for you. He was celebrating with me. Not every mentor is going to do that, but some will.

Jonathan: Thank you so much for that answer. Yeah, this reminds me Bplans we just started a podcast called the “BCAST,” and our most recent episode we had a guest, our VP of Business Development, Caroline Cummins. She came on and gave us a segment about “How to find a mentor?” One of the things she brought up was just the idea that, “Don’t look for …” It’s echoing what Jeff said today, don’t look for a one mentor, who is going to be the be all and all for your entire career and have all the answers, instead what’s going to help you is to articulate a need and clarify that need. If you have a specific thing that you’re looking for help for, clarify that.

Then find somebody who can help you answer that question, and show you how to do that specific thing. That might be the extend of that relationship is there they walk you through a path to do that one thing, and then that’s the end of that relationship, and you can find somebody else who can show you how to do another skill that you don’t have. I enjoyed what you said there, Jeff about this idea of the one teacher being up there if you can get the all the answers. It’s a myth.

Jeff Goins: I will add to that; don’t call that person a “Mentor.” I will teach this. I wrote about this in the book that you need not find one mentor. The worst way to get a mentor is to ask for one, the best way is to recognize the one who’s already there. I will literally, people will read that, and they will email me saying, “Will you be my mentor?” I will go on like, “Did you read the book?” Like the worst way to do this is to ask for one. Not that at a certain point you cancel the formalized relationship. Every mentor I’ve ever had, I never like I never started the relationship saying, “Will you be my mentor?” That’s a very committed thing.

That’s like asking to get married on the first day. Just hanging out or visiting with them or reading their blog or reading their books, learning from them, and then as you practice what they teach or whatever they do rubs off on you, you can get closer and closer to them, and then formalize it with titles later, but I think that can be really intimidating for a lot of people … A friend of mine, who runs a mentoring network recently told me this business manager in his 60, he said, “A lot of older men and women don’t feel like they have anything to answer, and so when you’re asking them to be your mentor, they’re intimidated by that because they’re insecure too about their experience, and they have just been going through life.” Titles can be unhelpful sometimes.

Jonathan: Sure, yeah, absolutely. We had another question from a teacher about the balance between working experience and just starting a business. I think may be you could probably give us an example from your own life when you were working as a marketing director, and making that transition to your blog, and being an author. How much work experience do you have to have in order to jump into starting your business or can you keep the day-job well also dipping your toe in the water. What’s the balance there?

Jeff Goins: I’m a fan of doing it on the side depending on the endeavor, depending on the venture that’s a little bit easier for something’s than other. I recognize that. It’s not the easy thing for somebody who wants to be a firefighter to practice late at night or early in the morning doing that. I told to get that, but I think there’s this myth that we believe that I have to wait for the perfect weather for me to go outside and go for a run. I’m going to wait for the perfect opportunity, the perfect circumstances for me to start. I realized that it’s just not true. There’s going to be no perfect opportunity.

You just need to begin, but how much experience do you need? This is why I started with that quote by Parker Palmer where he says, “Before I can tell my life what I wanted to do with, I need to listen to my life telling me who I am.” I think there’s an important process that has to have it before for you that I’m going to do this. It’s really awareness. It’s listening to your life, paying attention to what are you already doing. I like asking these three questions and this is called the “Sweetspot exercise,” and people have given these different names in different times. I certainly come up with this.

I’ll ask you just three questions that are already true about you right now, because a lot of times dreams are something that we anticipate happening in the future. One really we should be looking back at the past to understand, “What should I do next?” It’s not like your past dictate your future, but it should inform it. The three questions are this: What am I good at? What do I love doing? What does the world need, or what is the market demand? It’s the really three areas. There is passion, skill, and demand.

What I love doing? What am I good at? What am I being doing even though I can think much of it, it does seem obvious to me, what I have been doing for most of my life or for this past two years that in some way is unintentional practice for the next time what I’m going to do, and then, what’s a gap that I see in the world? What’s something that seems obvious to me that’s a need up there? Isn’t been that? When I need this need, there’s resonance of people going, “Yes, this makes sense.”

For me, writing was that thing I loved, and I never thought I could do it fulltime, but I said, “Okay, will forget about that,” That doesn’t … It was something about that right now. I love this. I’ve been doing it most of life, and I didn’t even realize that. I was surprised. I was on and off, written as a hobby. Then, whenever I talked people about writing, whenever I help somebody with their writing, whenever I created piece of confidence, was always really, really good. People would recognize it as, “Hey, you’re good at this.” Something that was recognized by, there’s a need that I was feeling, and when you’re thinking about the thing that you should do, whatever that is, I think it needs to fall me into sections of those three questions: Passion, skill, and demand.

When you do that there’s resonance with you, and there’s resonance with an audience, with the market, so that you can monetize that, you can make money of it that you can sustain that passion and skill. What I think you’ll find is that some, it’s not a question, I want to go do something new, and I have to acquire all this experience, but rather I have already been acquiring some experience to get me where I want to go. For me, that was realizing I was writing, but I had also been a marketing director for seven years. What I knew how to do was build on my audience.

When I decided to write, I thought, “What should I do? Well, I should take all of this information that I have accumulated in the past seven years.” I did really want to be a marketer, but I wanted to share my message with the world, as I took everything I knew about building a brand, and I applied it to a personal brand. I built a blog, and I used every trick I knew how to get in front of people, and then allowed me to grow personal brand very quickly, get published, start a business, do all of those things.

I didn’t expect to do that, I didn’t expect to use those seven years of working on a job, wondering what exactly I was doing there, and why I was there, and then while I was doing this I realized, “This is all practice and preparation for what’s to come.” There’s a quote by an unknown author. An anonymous author that says, “Everything that’s happened to you so far in your life is preparation for what’s to come.” I believe that’s true.

Jonathan: Excellent, yeah, and just to add those thoughts to bplans.com. We’re all about starting your own business, and planning your business, and we would also like to recommend that if you want to start your own business, keep the day-job first, and try to do this on a side. It shouldn’t be a reason to not start though. Don’t give yourself excuses for how I need more experience before I can start something a long time until you’re going to get that experience is by starting it.

Something that we recommend, and you might be familiar with this concept with lean planning and lean startup is the minimum viable product. What’s the smallest amount that you can produce that still works as a product or an idea how that you can basically put together, and throw on a market, and start testing it, and while you’re keeping your day-job, or is staying in your career, you’ve got this going, and you’re getting a short … Jeff’s life is an example of that of getting a blog going, and managing that while also having a job.

Typically we see, it takes a couple of years at minimum before you start to see that blossom, and you learn from those experiences before something that you could even think about making the switch, and jumping into fulltime, and abandoning the career you had before. Definitely, if you’re interested in more about that, you can go to bplans.com. We have several articles that you can read about that concept, turning a hobby into business or doing a side gate while you have a job. I really encourage you to check that out. One last question, it goes back to the mentorship and apprenticeship thing for you, Jeff is just as we’re going to close up this webinar, who was the mentor that keep people that have influenced you, and guided and shaped your life and career?

Jeff Goins: Yeah, I don’t echo, echo your echo. It took me two years, and I built it on the side, and so I’m a big fan of that. Don’t take a leap, build the bridge. I remember interviewing this family who moved to Burundi, the second poorest country in the world, located in East Africa. They started a coffee company. Asked, “How did you do this?” “Well, we took a leap,” and I said, “Oh, okay. How old did that take? What’s the process like?” “Well, we moved to South Africa, and we lived there for ten years, and then we spent a few years figuring out how to get to Burundi, and we worked for a nonprofit in South Africa for ten years, and then we moved to Burundi.”

I was like, “Okay, so you took a leap, and it took ten years to get to the other side.” That’s like a really slow motion leap. It really was the process of daily disciplined hard work, so love that place at that night. That’s the same [inaudible 01:00:57]. A really important mentor whom you mentioned was Michael Hyatt, it was somebody that I was [inaudible 01:01:04] from for two years from far, and then I reached out to him about five years ago, and sent him an email, and asked if we could meet. I tried to make it convenient for him, so while we’re both at a conference, went into missing each other at the conference, then I followed up, and he live in this town, and so I said, “This is an example of somebody who is in my proximity that I could reach out you that I was going, “Oh, I don’t have any opportunities. I don’t know anybody.”

I was living in [inaudible 01:01:34] in this small town where there’s a good amount of people that you can connect with what you’re doing, but I wanted to do writing, and publishing works, and speaking. I reached out to him, and “Sunday we could meet for coffee sometime,” and he said, “I’m very busy, and I’ll be.” He has talked to my sister. She said that, “He could make a mistake two months from now at this time,” and I said, “Brave, I’ll be there.” I met him, and then we ran into each other at a conference shortly after that, and it [inaudible 01:02:00] about seven months.

I just stayed in touch with him. I offered to do … I offered favor for him. I offered to help him, and I ended up doing this interview with him, on Twitter which he had never done before, and that was really fun. It was like a courtship. I think if you really want to get people invest in you, you need to court those relationships. The best way to begin is to be familiar with their work. Can you tell me how many people asked to meet with me for coffee, and have read one of my books? I don’t want to spend $12 on the book, but I’ll take an hour of your time over coffee here you basically share the same information.

I think that’s one of the best ways to get in front of the people. Just show interest in what they are doing, be familiar. Really over the course of that seven months we became friends. That was a very influential relationship that’s … That I credited a lot of success because of that relationship. There’s him, got into this another person that I’ve learned mostly from the far, and for many, many years. Then I had … There is plenty of mentors who aren’t famous people like my friend, Marc Almond, who’s really the person who’s helping me navigate this decision.

One of the things he helped me realize was that all the step that I was doing at the end of these two years that I mentioned I built this bridge, and I was making enough money that I didn’t need to work my day job any more. I was excited, I was passionate, I was still afraid, still afraid of failure, this would all end. He said to me, he said, “Jeff, what’s happened to you is rare. You need to consider the effect that this might not be an accident. This is your calling. You need to embrace this. Now that if you don’t it that’s like disobedience to the calling.”

That weighed on me. I realized, “Well, I’ve been thinking about how this looked. I’ve been thinking this is a selfish thing, but I’ve been thinking about the cost of not doing that.” That’s I mean a mentor helps you do that. They help you understand the pros and cons, and the cost of doing this, but also the cost of not doing this. I think a lot of people, maybe somebody listening right now, many people listening right now are thinking about something, may be something through this conversation stirred a feeling in you. Made you feel like you’ve to go do something that you haven’t yet done. Maybe it’s transition out of your day-job into becoming a full-time entrepreneur. Maybe it’s taking your business to the next level, maybe it’s quitting one business, and starting another like you’re really actually passionate about.

I think the first fear [inaudible 01:04:35] reaction, in a fear-based reaction to that challenge is, “What if I fail?” I think the better question is, “What that thing will happen if you do this, but rather what happens to you, to your soul, if you don’t at least try?” What happens if you don’t try? Like I said before, it’s a “Yes, we’re afraid of failure.” I get that, but be more afraid of not trying.

Jonathan: Well, thank you Jeff, just to bring that back around your story about Michael Hyatt. You have a new book out. They’re out of work and Michael was kind enough to give the review and a recommendation for that book. He says, “In the book The Art of Work, Jeff provides a clear framework for discerning our calling, developing our mastery, and maximizing our impact. This is the plan we’ve been waiting for from a guy we can trust,” so nice to see that relationship come back around, and that he’s recommending the book as well. For our listeners and webinar attendees, you can check out that book. It’s on Amazon currently. You can buy it now, The Art of Work by Jeff Goins.

You can also go to artofworkbook.com. Again we just want to thank you Jeff for taking the time to present the things you found in your writing of this book, and how our audience members can learn and develop their skills to be able to move to that point of doing what they allow, and finding their calling. One last little bit of logistics. We will be sending out follow-up email of this full-recorded webinar. It will take about a week for us to get the video put together, and send that email out to you, so that will be coming and like I said in about a week. Jeff, thank you so much for joining us. I think we need to wrap up the webinar now. Thanks for all that you brought today.

Jeff Goins: Yeah, thank you Jonathan. Thanks bplans. Thanks everybody for being a part of this. Like Jonathan said, you’re free to check up the book website. You can find more about that, it’s free that you get there. If you have any questions or you didn’t get the answer, reach out to me on Twitter @jeffgoins. I’ll be happy to answer those as well. Thanks for having me guys, and hope you have a great day.

Jonathan: Fantastic. Thanks to you. Thank you everyone.

For our latest webinar, we discussed “How to Lose an Employee in 10 Days,” outlining major mistakes an entrepreneur or CEO should avoid if they want to hold onto valuable employees. I was joined in this webinar by Matt Rissell, the CEO of TSheets Time Tracking. If you’re not familiar with TSheets, they are a cloud hosted time tracking system. Their mantra is “We love employees,” and this mantra really fits their culture. I’ve known Matt and many folks on his team now for about a year and a half, and we’ve partnered together several times with them.

Matt has done an amazing job of creating a culture as an entrepreneur and building his company from the ground up. Our topic for this webinar is what not to do if you want to keep good employees, so this topic is extremely relevant to anyone who is starting or running a business. Matt has built his business to combine his high tech experience with his friendly, real world insight into small business ownership. With that, it’s my pleasure to turn the webinar over to Matt Rissell, CEO of TSheets.com.

The full audio and slide deck are included above, and the full transcript can be found below:

Matt Rissell: How to lose an employee in 10 days. I don’t know if you’ve all had the chance to see the movie. I’ve seen it a couple of times just recently when we drove the idea, the title for this topic. It’s a movie about Matt McConaughey and Kate Hudson. I’m always a romantic, which I know Caroline is a big romantic. For you guys that are out there in the tech world, I highly recommend the movie, believe it or not, even though it’s romantic. It’s funny. It’s really funny. It’s a play off of basically two people with alternate agendas that end up trying to trick each other to push each other away. One of them is supposed to keep one. One of them is trying to push the other away, and then they end up, well I can’t tell you the ending. Great movie.

The concept of “How to Lose an Employee in 10 Days.” I’m probably preaching to the choir at this point, but getting the right employees in your organization is incredibly difficult. I’ve heard from and talked to other entrepreneurs, and even I have made these mistakes where I didn’t actually listen to mentors and to other people about doing things right when you finally get the right person. The cost of losing a good employee is absolutely unbelievable. It’s more than just financial.
It’s the cost of having to train. It’s the cost of your reputation, whether it be in the community or when you’re trying to recruit other people. Even the reputation that you have with your customers if you’re constantly introducing them to, oh, here’s Joey or here’s Sally our new employee replacing the last one that was only here for 10 days. The impact can be tremendous to your company and can literally stunt the growth of your company.

If you think about what is lost when you lose a really good employee, the impact is tremendous. My goal for today is literally to, if we spend the next few minutes together and you get one thing, a new idea, something that you’re going to change when you hire somebody or when you interview them, and it helps you keep one of your good employees. The ones that you really want to have in your company that you see being a part of your company long term. I would count this as a huge success. If it’s more than one, that’s even better.

One of the concepts that I think is becoming more and more evident, and the statistics show that millennials actually don’t leave because of money. It’s because of something else that happened in the on-boarding process that causes people and causes employees to leave. The way we’re going to go through this is we’re going to go through it quickly. Basically giving you a benchmark at the beginning. I’m not going to go in depth on how to interview or who to hire. We’re going to touch on it so that we make sure that we get the right person in. Those alone could really be a webinar in and of itself.

Then we’re going to get into, okay, so now that you’ve hired or what you’ve done in the interview process. How do you keep them? And that’s where we’re going to spend the majority of our time. Then throughout, please ask questions.

We’re going to kick this off. Are you ready to hire? You’re just starting off as an entrepreneur. You’re starting a new company. How do you know that you’re ready to hire? Well first, from a financial standpoint you have to have enough revenue. Don’t get me wrong. No one would be able to hire anybody, or even would be able to hire a couple of employees if you had to have cash, but you’ve got to have a run rate and a forecast that you can comfortably do it. Not just their salary. Not just their taxes. You got to think about the resources that they’re going to need as well.

Sit down and plan out what it is that it’s going to completely cost you to hire this person. There’s actually an MIT study that’s an estimate. I think this is a little on the high side, but this is their numbers. That between training, on-boarding, and the amount of time that’s spent in getting a new employee up to date is between $9000 and $19000 to get somebody on board. Make sure that you’re prepared to make the investment into it.

One of the most frustrating things, when I said resources for employees is when you sit them down. Whether it be a landscape company. They say, you sent them out to go to a job, and they have dull pipe cutters, let’s say, or a lawnmower that doesn’t work. In a tech company, you say, yeah, you’ve got to work, but we really don’t have internet for you or a computer or headphones. That they don’t have the actual resources that they need to be successful.

Don’t forget that. This is one of those places the way I’ve personally done this. Look, I’ve made a lot of mistakes. I’ve made a lot of these mistakes, and I’ve built six companies so far. All of them so far have been successful, but not without. I’ve made extraordinary mistakes. Sometimes I’m embarrassed to say that I continued to make them. One of the things that I do, and I still do to this day, is I have a proforma. That’s one thing that Liveplan does.

I allow that proforma to control and make decisions for me as I plan out who and when I can hire them. If you have a proforma, and this is exactly what Liveplan does. You can plug into a line item and say, okay, I’m going to hire Bobby. These are my revenues. These are my expenses. I’m going to hire Bobby. I can put all of Bobby’s expenses into that column, forecast it out for the next year, and I can see how that’s going to affect my business.

If you don’t have a proforma, my recommendation is to go to Liveplan. They will walk you through setting one up for yourselves. You can look online, and you can get a spreadsheet, which is a much more manual process. Allow that. Don’t make big financial decisions without a proforma. Allow it to really control your company. Another-

Caroline Cummings: Matt, I want to pop in with a quick question for you.

Matt Rissell: Yeah?

Caroline Cummings: A technical question about what you mean by run rate?

Matt Rissell: Good question. A run rate is when let’s say a company was doing in the month of January. Let’s say they did $10000 in a particular month. Well you can say, well my revenue is going to be $120000 this year. That would not be a run rate. That would be if you were to forecast out your current revenue.

A run rate is let’s say you did $8000 in December, $6000 in November. So you had six, eight, ten. And let’s say your run rate then is to do 12. And let’s say you’re forecasting out a big March, and you’re going to do $15000 in March. Basically your run rate is the increase of revenue based on historical and future happenings. Hopefully that answers your question. It’s a great question.

Be honest with yourself. A big mistake that can be made is if you’re doing your run rate. You have the over optimistic entrepreneur, right? Where you’re like, oh it’s going to be an amazing March, and you get yourself in trouble. Make sure that when you’re forecasting out and you’re getting your run rate, it’s conservative and you’re basing it on some conservative numbers. If you say, yeah, I’m ready to hire an employee because of this great thing that’s going to happen in three months, and that great thing doesn’t happen, you still better be okay. That employee has to be able to eat and feed their family. It’s a lot of responsibility to take on an employee. It even goes up, like it or not, when they have a family.

A few other just quick points that you know when you’re ready to hire is number one, do you have a new channel that you’re developing? You’re looking at your business. You’re like I’m not sure if I’m going to hire somebody. Do you have a new channel that you’re trying to develop? Are you able to keep up with your current work? In other words, there a lot of companies out there, entrepreneurs, that stunt the own growth of their company, because they’re like oh, I have to do everything. I’m just going to work myself into the ground. They limit themselves by themselves.

The last thing is are you turning down work? Are you turning down projects if you’re a contractor? Or you’re a landscaper, or you’re a construction company. If you’re starting to turn down. Now make sure it’s profitable work. Make sure it makes sense. Again, allow your proforma to make the decision. Those are a few ways to know that you’re ready to hire your first company.

Something that I recommend so much is to get a payroll company. Before you hire that person, have a payroll company like ZenPayroll, that works great with TSheets by the way, or a PEO that will take all of the logistics and the taxes and the legal part of hiring an employee. They absorb a lot of those liabilities. That makes it so much easier and not daunting. I can’t recommend that enough.

Now quickly, before we get into how you lose one, who do you hire? Again, this could be a topic in and of itself. I would be remiss not to just go over a few of these points. First of all, who you hire? I tell this to people all of the time. It’s something that I do for myself as well all the time. That’s interview yourself. Literally, go get a chair, well two chairs. Sit down in one of them. Face the empty towards you, and start interviewing yourself.

When you start asking yourself questions categorize the things that you’re doing into three different categories—things that you absolutely, positively should not be doing. Things that you can do, but you may not enjoy and they’re not your sweet spot. Then the things that you can hit it out of the park.

For me, I’m not technical in nature. I’m not an engineer. I don’t think that way. I can do it, and I’m good at math. Technical is something that I absolutely know that I should not be doing. Any of the companies that I have started, I always, before I even start the company I go bring somebody technical with me. Now if you’re a technical person, I want to combat this often mindset that people have, and that’s that people think that, oh, I can’t lead my company because I’m a technical person. I’m a technician.

That’s not at all accurate. I’m a believer that you can lead your company from any place within an organization. In other words, you can be on the legal side. You can be on the financial side. You can be on the marketing side. You can lead your company. Don’t think that because you’re technical you can’t be the CEO or leader of your company.

After you interview yourself, how else do you know who to hire? One of the best ways to recruit a new employee hands down, all the statistics show is that you hire somebody from somebody that you know. Hire a referral. I’m going to give you a quick stat. The average length of employment for all initial hires after two years, if an employee has come from a referral, after two years there’s a 45 percent retention. From job boards, it’s 20 percent. 20 percent of them from job boards stick around after one year, and only 14 percent after two years. That’s staggering statistics.

We talked about how expensive it is to turn an employee over. Make no mistake. That’s how TSheets has been able to grow is that we’ve been able to get a group of employees at TSheets that believe in what we’re doing. They’re having a good time. They enjoy their work environment. They’re recruiting their friends. As a matter of fact, we sat as we were preparing for this with a group of my employees. I asked them. I said, can you name a single employee at TSheets that hasn’t come from a referral? No one has left us. We’ve had almost a zero turnover. We may have lost two people in the last couple of years.

Another thing to consider is that if the employee does not come, or the recruit doesn’t come from a referral trusting your gut isn’t even close to being enough. Statistically, 40 percent of all resumes and job applications are based on completely false, or at the very least over-inflated information. In other words, you have no idea who that person is in front of you if they haven’t come from a referral. If they come from referral and it’s somebody you trust, I mean you’ve gained a tremendous advantage in that recruiting process.

Caroline Cummings: Matt, I’ve got a question for you here.

Matt Rissell: Yeah.

Caroline Cummings: The stat that you were sharing earlier about the percentages of employees that are turning out from job board versus referral, did that study breakdown baby boomers versus Gen Y or was it more general?

Matt Rissell: That’s a good question. That was a general. It wasn’t generational specific, but that’s a really good question. I’d actually be interested in seeing if it’s changed.

Caroline Cummings: Okay. Thank you.

Matt Rissell: Great question.

Then when it comes to who to hire, my recommendation, and this is who I am, is always be recruiting. ABR, always be recruiting. When you’re going out to eat, just as hard as you sell your product or your service. When you’re as passionate, and you’re talking about your widget or you’re talking about your service. You’re selling with everything you’ve got. Do the same thing when it comes to recruiting.

I’m a firm believer. It’s a foundational principle I think that the potential of a company is limited by the sum of the potential of each individual. In other words, the people that you get to be a part of your organization, even if you’re a rock star, if you’re getting people with really low potential, the ability and the mountains that your company can climb will be reduced dramatically.

We all want rock stars. To get rock stars, you always have to be recruiting. I’ll even hire people, A players, and get them on my bus when I don’t necessarily know the right seat for them to be on. If I can afford them, and they’re amazing, and they’re looking, they’re already employed typically, I will get them on my bus. I will find a way to afford them. When you get really smart people with a great attitude that are passionate about your company, they find a way to contribute.

As often as possible hire people that are already employed just as I had just said. Stay away from close friends and family as tempting as it is. I’m still tempted often, because a lot of people want to work here at TSheets to hire good friends. I have burned more relationships, and it’s just not worth it. Family makes it even worse, because of the emotions that get involved. Stay away from those.

Caroline Cummings: Matt, just to jump in. I’ve been in that same situation having had a couple of tech companies on my own and been caught in that route. It’s a difficult one to do, but you really have to kind of have that as a mantra and stick to it.

Another question for you, and you might be getting to this in your talk here is do you have some recommendation on the hiring process? When you go through the interviewing?

Matt Rissell: Yes. Actually, that’s the very next step. Thank you for asking.

We don’t go into depth. We do not go into depth on the interview process. Again, there’s a whole bunch more here. There’s been books that have been written about this. I’m going to give some basics, and some of things that we’ve done that we know are right. In this case, because it’s now basically started how to lose an employee in 10 days. It definitely starts with the interview process. I’m glad you asked. Yes.

Number one, and this may seem simple, but, don’t be transparent. If you want to lose your employees in 10 days, don’t be transparent. You’re like, oh, that’s not that big of a deal. Of course, that’s basic. Not really. I’m going to give you some really practical examples as to why and how I deal with this.

Number one. A good employee or a good prospect for an employee will be interviewing you too. I mean especially the good ones. They’re going to be interviewing you. If you think about the movie in this case, it’s a great picture because this is an image of when they all decided to do this, how to lose a guy in 10 days. If they would have been transparent with each other, obviously there wouldn’t have been a funny movie. It would have been a funny movie, because there wouldn’t have been an issue through the dating process.

The same goes in the interview process. You’re going to be tempted when they start asking you questions to tell them what they want to hear. I highly recommend you don’t do that. That means you have to prepare going into all of your interviews as to who you are as a company. What it’s like to really work there. What will make them successful, and what won’t make them successful. Like what are the big things? What the people are like. There’s different cultures in different organizations. What the work ethic is like.

I’ll tell you what I do. In my interview process with employees, and this is every single interview, I still, because we’re only at 40 employees, I still interview every single employee. I’m the last in line to interview folks. I sit down. After we chitty-chat for a second, just basically small talk, whatever pictures are on the wall or whatever. I start to ask questions. Then I stop them. I say, the agenda for the meeting is I’m going to ask you some questions. You’re going to have some questions for me. I say, my goal for this is when you go to ask me questions, I commit to you. I tell them this. I commit to you to be absolutely transparent. The last thing that I want to have happen is that at the end of three months, six months, is for you to start looking at this company going, wait a second. This isn’t the company that I signed up for. This is completely different.

Then I’ll say, and I just ask the same from you is that you’ll be transparent as well. We’re going to ask questions so that we don’t get down the road three to six months, and we go this isn’t the employee that we hired. Basically when I commit to being transparent with them, that relaxes them. They start being transparent with me. Then I start asking them, what is it that you really want to do? All of a sudden it’s amazing what happens. Their guard starts to come down. They’re like, this is really who I want to be. This is really what I want to do. It starts, and it lays the foundation for a great conversation.

I’ll give you one of mine. One of the things that I know that as a qualifier at TSheets to work for TSheets is, you might get some value in this. I say, look, when I started TSheets I know for a fact something that I’m not good at, and that’s micromanagement. I’m not. People often say, oh I don’t like micromanagement. I don’t want to work for a micro manager. That’s not a good or bad thing, but they just need it. Those are great employees to have in a government or a larger organization where there’s lot of bureaucracy. Folks, there’s lot of levels of supervisors that can be watching over each others’ shoulders.

I said there’s nothing wrong with that. That’s fine. At TSheets you’ll have clear expectations. You’ll know exactly what you’re supposed to be doing. You’re not going to come in every day and have somebody be telling you what to do. You’ve got to be very self-motivated and be willing to come in, and while we have a lot of fun, you have to work your face off. You have to hustle. That’s just who we are.

The only employees that have ever left TSheets quickly, or we’ve had to remove employees from TSheets quickly, are those that didn’t get that, as funny as it seems. I won’t go into that any more.

Caroline Cummings: Matt, I wanted to jump in and also share what’s worked for us here at Palo Alto Software with interviewing. When we didn’t have this process that I’m about to tell you, it wasn’t as successful. We have really a five-part interview process. First thing it’s particularly if I’m hiring, because it’s for business development and sales folks on the team. We do a phone call, because I want to hear how they are on the phone. I want to hear how they handle themselves. We exchange some emails and see how they do email communication.

I then assign them a homework assignment where they have to do a presentation and use Google Docs and use some of the technology that we use. I’m already trying to pretend like they’re on the team and see how that fits.

Then they do an in-person interview first with me for about 30 minutes. Then they actually present their homework to my entire team, because they’re going to be working on my team. I’m starting to see culture check, culture fit, how they interact, how they handle pressure.

Then I check references. I always check a peer, a subordinate, and someone that they reported in to so we get a good overview of what folks have said about them that have worked with them in the past.

Then finally, if they make it through all of that, we then do a culture check with the management team. I like that you have people come in, and ultimately at the end they have to interview with you. So that we hit on all the touch points. By that point you know for sure if this person culturally is a good fit.

Interestingly enough, 50 percent of the people don’t ever even do the homework assignment. It helps weed out a lot of the people and saves time and money like you were talking about earlier. It’s very expensive to do hiring.

Matt Rissell: That’s a great five-step process, and we do as well. I didn’t want to go into, just I would like to ask you even questions. It’d be great to compare and contrast some of those steps and what we do as well. Thank you for sharing that.

Caroline Cummings: That’ll be another webinar for you and I to do.

Matt Rissell: We should do it. We really should.

Another one in the interview process that I have, just basic concept. Just don’t mislead them. These are some of the most common mistakes that I see that people leave right away from companies or very quickly. Like in the first three to six months. When people make promises that they can’t keep, or don’t intend to keep. It really frustrates the employees. I’m telling you this now. If you’re telling people those things just to get them inside your company, it will cost you more down the road if you have to tell somebody that’s not the truth about your organization. So don’t mislead them. Don’t promise promotions and raises that you can’t give them. Just like when you’re selling your product or service. Don’t under promise. I mean under promise and over deliver.

One of the best ways that we can recruit really good candidates is when they’re employed somewhere else. And they say something like, you know, I was told that there was upward mobility and that I could grow into an executive position. I’m currently a senior manager. They have no intentions of hiring any kind of diverse group. You have to have the certain look, a certain gender type to fit on the executive team. Those are the ones that are fantastic. That are just prime for picking. Something that you can be tempted by, and don’t mislead them.

After you’re hired them, and they’ve signed on the dotted line. How to lose an employee in the first 10 days. The first thing is if you want to lose them quickly, just don’t have a plan. I’m talking to you probably folks that only hired one or two or three or four employees here. Cause if you’ve hired four or five employees now you know, geez, I need a plan. If you haven’t, and hopefully this will help prevent you from feeling like geez, why did I have a frustrated employee right out of the shoot?

Now I’m not expecting for you to have a Google, or Amazon level, or Zappos level on-boarding plan, right, that’s filled with trinkets and toys and really expensive trainings. I’m not expecting for a fully [inaudible 25:46] system, but here are some must-haves for your plan.

Number one, have a job description. Take the time to write out what they’re supposed to be doing. Then agree with them. Make sure that they understand it completely.

Number two is introductions to team members. Walk them around. I don’t care if your employees are coming in and out and you have mobile employees. Let’s say you have sales employees or a service company where you have folks coming in and out. Take them around. Spend the time to take a day and introduce them to people.

The third one is assign a trainer or a mentor to them. Basically, they don’t have to be the person that trains them on the product or the actual trainer if you have a corporate trainer or something like that. It’s somebody that can basically be their, in a sense, big brother or big sister that will shepherd them through the first couple of weeks at least. That helps them on-board. They’ve got somebody to introduce them around. They’ve got somebody to take them out to lunch. As the CEO or entrepreneur, you don’t always have the time to do that. Have somebody that basically is their shepherd for the first couple of weeks.

Then, have an idea of how you’re going to train them. I mean even if it’s only an organized list of reading and planning for job shadowing. Have a plan of how they’re going to get the training that they need to be successful at their job.

Which the next one is have a clear 30, 60 and 90-day goals. Now the 60 and 90-day may be a little bit stretch. Your goal for this, if you can get a goal for this, is to get them to be successful. If you can get an employee, especially the ones you want to keep successful right away, success I promise you will breed success.

Have somebody that can take care of all of your HR documents, so that when they come and they go, do I need to sign a W2? Have all of that stuff pre-planned.
Another one. This has been a huge difference-maker for TSheets is lunch with the founders. We’re going to talk more about this in a minute. What we do is we sit people down. Take them out to lunch, and we say, look, you’re already over the threshold. We’re here. Ask any questions that you want. It’s crazy some of the great questions that they ask. It’s a great opportunity for us. We tell them the history of TSheets. We say, gosh, it was only a few years ago that we couldn’t afford taking people out to lunch, right? And so kind of make sure that they always have that perspective of what it was like at the very beginning.

Next thing is make sure that they know your mission and your vision, who you are as a company and where you’re headed. It’s like, I’m a pilot, it’s like somebody getting on my plane with me, and they have no idea where I’m going. Make sure that they know exactly where you’re headed as a company, and what you’re hoping to accomplish as the CEO.

Lastly, when you communicate that vision, make sure that they know whatever they’re going to be doing on a daily basis and how that will affect the vision. In other words, how what they’re doing, their piece of the puzzle, fits into the big picture. I’ve got a story to tell you, but we’ll have to do that next time.

Next, so after hiring. You got them in. How to lose an employee. If you set unrealistic expectations, you’re going to lose your employee. If you make them unsuccessful right out of the gate, or if their expectations are unclear. Unless they have the wherewithal and the self-initiative and really the confidence. They got to have balls. They got to have guts to come up and ask you and say, look, what do you expect of me? Which happens, unfortunately that people have to do that. Don’t make them do that. Sit down with them and work on what it will look like at the end of 30 days if it’s successful. Make them clear, and set them up again for success. Another great way to recruit an employee is find somebody in their first year in another company that wasn’t set up for success. That’s still a rock star, but again, didn’t have the tools. Didn’t have the clear goals.

The things that we do is that we set expectations. Chunk it up into, if you’re going to developer and you brought them on, learn this section of code base. Things that they can do on their own.

Another one is for like customer service. We say, you’ve got to be able to give a demo to one of our other internal customer experience reps within two weeks. Here’s an example of one, and we show them. Then it’s up to them to walk through and learn the product and be prepared for that.

So expectations. After hiring them, if you want to lose them in 10 days or quickly just haze them. Now you’re going to be surprised. Like yeah, this isn’t a fraternity, right? Where you send them out and probably do keg stands or something like that for 30 seconds until they pass out. That’s not what I’m saying. What I am saying is there are a lot of practical examples. You may be laughing. It still happens all of the time. What it does is it breaks down trust.

I can actually give you several examples, personal ones, where when I was in college I got a job as a server. It was my very first day on the job. You may not think this is a big deal, but it broke down instantly the trust. Everyone thought it was hilarious. One of my jobs when we were closing down the restaurant, they were teaching me how to go through the close list. They looked at me and they said, Matt, we need you to empty the hot water bin. I’m like, well what do I use to empty the hot water bin? They said, well go get one of those big tubs over there to empty the hot water bin. I spent like an hour emptying bucket after bucket of the hot water bin. Well it turns out you can’t ever empty the hot water bin. It just continues to go on.

So anyway, they thought that was hilarious. To be honest with you, it didn’t work. Now I actually think though that there are some great ways to initiate. I actually recommend initiating your employees, but you have to prepare them for it. One of things we do, and I recommend it, is we have a staff meeting every other week. It’s all hands staff meeting, so all 40 of us get into a room, and we all talk. One of the things that happens is that all of the new employees have to have our core values memorized. They can’t word for word repeat our core values back to us, well then their manager has to do 20 push-ups. If they do recite them word for word, then I have to do 20 push-ups.

Needless to say I actually end up doing a lot of push-ups as part of my workout regimen. It’s a lot of fun, and it’s something that we do for everyone. Again, it sets them up to be successful in front of everyone, which again, I can’t encourage you to do that enough. Even large companies, I think, fail miserably at that.

Caroline Cummings: Matt, that’s a really fun thing to add to your culture. I love that.

There’s another question here for you that’s actually a really good one. If you’re constantly recruiting rock stars out there in the world, does that open you up to having other companies steal employees from you?

Matt Rissell: Oh my gosh. That is a phenomenal question. Really good question. The answer is absolutely. As a matter of fact, over 50 percent of my team this year alone has been recruited from an outside company. A lot of them, because they’re rock stars, and they are. They’re the best I can get my hands on. I mean literally, they’re the best I can get my hands on. Everyone wants them.

What’s interesting is that most of them, from my knowledge, at least what was told to me, they were offered more money. But we have not lost a single employee to outside and to another company. The reason, and I strongly believe this, is that we’ve got a great product, but that’s not it. It’s our culture. I actually have a whole presentation wrapped around how culture basically trumps everything. I mean culture trumps strategy. Culture trumps whether you have a great product or a bad product and how people believe in it. It’s a part of your vision. It’s a part of your mission. It’s part of what happens when you walk into the door.

This is an interesting about having rock stars. Really smart people and really good high-performing people, as long as egos are checked at the door they also want to be around other smart people. I mean birds of a feather, and it’s true. The more rock stars you get, the more rock stars you’ll be able to keep and be able to get more of them. They’ll want to be around each other.

Caroline Cummings: That’s a great answer, Matt. Thank you.

Another question that’s also really excellent is particularly in startups or smaller businesses where you have a nimble environment. You’re trying to run your business in a really lean way. What do you do if you hire someone for one position, and then you have to change their job description? Or you end up piling additional work on them that wasn’t in their job description? How do you handle that? I know you guys are very lean. You guys run a really tight ship. How do you do that if you have to change someone’s job description?

Matt Rissell: Well number one, that is another great question. Yes, it does. It happens all of the time. As a founder, an entrepreneur, or a senior leader you know that’s part of your job description. It just happens like every day.

Number one, is what we do when we have to change that with somebody, and one of the things that I learned on a little bit of a side note that may answer your question. If we do have an employee, I didn’t put this in here, but if we do have an employee that is under-performing but I know that they have the capability of over-performing, don’t always think that it means that they need to be fired, or that they need to leave.

One of my lessons that I learned, and I’ve learned this the hard way and then I got lucky. It’s hard to know the difference. They’re on the right bus possibly, but they’re just in the wrong seat. That’s something that we have done and I have done. If I look to somebody, and I look at their potential and who they are as a person, and I love all of those things, and I love their skill sets and their capabilities. I am now, because of my experiences, much more willing to just move them into a different seat. Did that answer the question, Caroline?

Caroline Cummings: Yes. I think that’s great. Thank you.

Matt Rissell: Great question.

Okay. So don’t haze them. Next is don’t allow them to ask tough questions on their first few weeks. Personally, I thought that this part of the movie was absolutely hilarious. What happens basically, they’re only three days into a relationship and the dating. They already go to couples therapy, which actually this person is not a therapist. Have you seen this, Caroline? You ever see the movie Caroline?

Caroline Cummings: Yes, I have. Yeah, I have seen the movie. It’s hilarious.

Matt Rissell: Yes. Anyway, this particular part it ends up that she’s not a therapist. She’s one of the girl’s friends. It’s basically setting him up to fail once again.

Essentially what I’ve seen happen is that new employees will come into a company, and they start asking really difficult questions. Listen to me, it’s going to happen. What I see most entrepreneurs do is they get pissed, or they feel like threatened by these hard questions.

If you want to lose good employees, because good employees will ask these tough questions, just minimize them, or make it what we quote/unquote call “a thing” out of every question or something that they challenge. What we have done is that we embrace them. We actually encourage it. As a matter of fact, we always tell all of our new employees is ask questions. Usually the questions comes up, it sounds like this. Why do you guys do this this way? A lot of times the answer is well because we’ve always done that, or because we couldn’t afford to do it any other way. Great question.

They will provide you a new perspective on your company, a new perspective on your product, a new perspective on your processes. We actually ask employees, what ideas do you have? After you’re here for a week before what we call you getting cursed with the knowledge of TSheets. In other words, once you get in here it’s not a curse. It’s not a bad thing. Basically it removes your ability to become unbiased and get an outside perspective. As you’re coming in, you’re getting immersed into our culture. Ask questions about why we do things, how things began, because that’s how we’re going to get challenged, and that’s how we’re going to get better. Embrace those questions as difficult as it can, because most likely as the entrepreneur or leader, you’re the one that created those things in the first place.

Next thing is if you want to lose your employees don’t be relational. Again, I think this is absolutely foundational to a company and some things that we do. If you’ve seen the movie, one of the things that she does to be relational is she, anyhow, she’s trying to drive him away. She nicknames things like Princess Sofia or something like that. I actually think nicknames are a good thing, and a good thing inside the company. It gives people a personal brand inside your company. Like, what are our core values? They need to be appropriate nicknames. I love giving people nicknames, and people actually like it. I make sure it’s okay.

One of our core values is healthy, to work really hard and to play really hard. Everyone gets a free gym membership. We got a lot of people here that are in really good shape. We have a few of them here that we call fit and miss, and it’s one of the brands out there. We’ve got a lot of fun nicknames that we give people, and they love it. What happens is people feel like a manager or an entrepreneur. They’ve never had an employee, or they’re new to it. It feels uncomfortable. You can have a relationship. Even I would say a friendship with your employees. I encourage it. I do. Now you can’t ever confuse being a leader with being a friend. It doesn’t have to be friends like we go hang out on the weekends friends. You can still be a friend with somebody and be able to have a professional relationship. Be relational.

Caroline Cummings: Matt, I’ve got a question for you here. This is another good one. You’re getting some really good and tough questions, too. I don’t know if you’d had to do this in any of the companies that you’ve run where you’ve had to kind of set a culture when you have employees who are virtual or spread out in a wide geographical positioning. How do you set a culture in that way?

Matt Rissell: Yes, we have. As a matter of fact, when we first started TSheets we had remote employees. Matter of fact, we were all remote for about a year working from our houses. Then at Cartridge World we had four locations. So not everybody got to see each other really ever, cause they were assigned to certain locations. Even now with TSheets we’ve got some people out of state as well.

Some of the things that you can do in a remote situation is number one, if at all possible, get at least a few times a year face-to-face meetings. Nothing can replace it. Number two is over-communicate. You can see how hard it is when you’re in an office to make sure everyone is always on the same page and communicate. It is a multiplying affect in its difficulty when everyone is always remote. Make sure that you’re always communicating. Number three is be careful of email. It is really easy to miscommunicate over email. Number four, as an entrepreneur or leader, have group meetings still. Get everybody on so that they can hear you, when you give your presentation they can hear your passion, your mission, your conviction that you have about the success of your company. Whether it’s going through a great new opportunity or going through a downturn, they have to hear it from you to believe it.

Caroline Cummings: Yeah. That’s great advice, Matt. I would add to it too having had some employees in Ireland and in the UK. We made sure that every week that we actually saw each other through Skype or Google Hangout. That adds another element to the voice so that you actually get to see other in the conference room or where you are working from home so that you keep that personal relationship. Keep the vibe of the personal relationship going, because that’s all part of the culture. That’s a great question. Thanks for asking it.

Matt Rissell: Yeah. It’s becoming more and more prevalent. A lot more companies are going to remote employees, because they have the ability to connect in. Everything can be done remote. I do recommend though if at all possible have a home base, and get people in if they’re in the same area get them together.

Caroline Cummings: Great.

Matt Rissell: Next is after hiring, you have them on board. If you want to lose them don’t allow them to have some personal space. You may be a service company or a landscape company where they just come in and out. If they’re a customer service and they have to share a desk with somebody in any way, shape or form that you can do this, give them a place to nest in. Everybody has a different level of how they want to nest. We have all extremes here at TSheets. We’ve actually moved, in the startup, right? We went through three or four, depending on how you count it, go to market absolute failures. I mean bombs. Each one basically had a new location that we were out here in Boise. We had to move a bunch of times. You could definitely see the different levels of people needing to nest.

If you don’t give somebody that has a high need to nest, is what we call it, they’ll leave you. They will. They’ll be uncomfortable. It actually affects their security and their confidence if they don’t have it. What we’ve done at TSheets [inaudible 45:32] we just bought our own 14000-square-foot building so that people know that this is where we’re going to be. I didn’t see this coming. As a result, a bunch of our employees have actually started to buy houses around our building, because they know we’re not going anywhere.

From a nesting standpoint, we have somebody in our company I know all they need is literally their laptop and a cup of coffee, and that’s their nesting. We have others, however, that require curtains, walls, trinkets, toys, candy, several different buckets of candy, snacks that is not considered candy, paintings, pictures. They have their favorite spices, and I don’t mean like one or two. I mean like an entire drawer full. They have plants. They have chairs, like multiple chairs. They have things up like curtains and these walls are removable to affect the amount of light. I mean it’s amazing. It’s a little bit of like a home away from home. I love it, because the more that they nest, the more comfortable they feel. The more comfortable they feel, the more they feel free to work hard, work their faces off and hustle. They have fun doing it.

The next one, and this is so important. This gal here on the movie how to lose a guy, I mean she was a jerk. I mean she’s like a professional jerk. She’s in all kinds of movies. If you want your employees to leave, make your employees feel like you’re totally unapproachable. I think it’s absolutely ridiculous, and actually plays more to the fears of the executives than it does the employees. It makes everybody feel uncomfortable. Don’t just hustle people around.

I have an open door policy all the time unless my door is closed, which isn’t very often. People are allowed to come in, ask me questions. I want to connect with them, and they do too. They want to hear from you personally and have a personal relationship with you. I don’t care how big you get. Don’t remove yourself from being approachable. I think a great example of this, if you get the chance to meet Brad Smith over at Intuit, they have 10000 employees. He walks around. He hugs employees. I’ve seen like a supervisor kind of shuffle their employee away from them. Like oh, he’s a CEO and $24 billion dollar—he actually says no. He comes over, and he gives them a great big hug and says, hey, it’s nice to meet you. Welcome to the company. That goes miles. Don’t act like they’re unapproachable.

After hiring, plan their entire future for them. Let’s say you get a rock star, and just like that question that came in, you start getting scared. You start thinking, oh geez, I don’t want my employees to be recruited and to leave. You start trying to put all these handcuffs on them and try to corral them into look, this is what the next 10 years look like. If you saw the movie, she went and did cutouts of what their pictures of their kids would look like after being together for four days. Employees don’t like that. Employees want to feel the freedom to leave. If they feel the freedom to leave that means they’re empowered to make the decision to stay. You want empowered employees.

The last thing that you want to do in this case if you think of it is create a rut for them, that they can see all the way down the road straight ahead of them. It’s like going on a desert, and you’re on a drive. You were going to drive across Utah. You can literally see, I think, 40 miles at one point when you’re coming down a hill. There’s nothing out there except just this long road. Doesn’t look really exciting to them. Don’t plan too far ahead for them and make it feel like you’re suffocating them.

One of the last ones here, we don’t have a whole lot of time to go into this. If you want to lose your employee, don’t find out what’s important to them. One of the first things that I do and all of our executives here do at TSheets is that we find out what’s important to them. They’re already in. Are they big family people? We’ve got professional level road bike racers here. That’s what they do. Whatever it is that they are important, it’s like any relationships, act important to it. Don’t act like because you’re their manager that you don’t need to be important. That they need to be acting interested in what’s important to you. Do the reverse. If you do the reverse and you show them how much you care, they’ll work so hard. They’ll be so loyal to you.

That’s the end. This is a picture of TSheets. This is a smaller version of TSheets. This was done about eight months ago. We’ve since actually added another 25 percent of our employees. We have a golf outing. We actually do two golf outings a year. We all do dress up and have themes. We have a blast when we do it together.

I hope you guys enjoyed this. If you have any questions for me and also to get more information on how to be a CEO, decisions about hiring new employees, and I talk about everything from the financial side all the way through the soft side of being an entrepreneur. You can sign up at tsheets.com/ceo. So you go there. Also Bplans is a phenomenal resource for any information as an entrepreneur.

We have just like one or two minutes if there’s any other questions, Caroline? Actually, I think we’re out of time, but I’ll hand it back to you. Thank you again so much for having me on your webinar.

Caroline Cummings: Yeah. Thank you, Matt. That was amazing. I love that you took a really important topic and used a really fun movie, “How to Lose a Guy in 10 Days,” and created that parallel conversation. I always like presenters who share contents and tell a story. There’s so much of what you shared that I’m going to remember. I’m sure that the folks on the webinar are going to remember it as well.

We do have a couple more questions, but we have run out of time. Luckily, we were able to answer I would say about 90 percent of the questions. What we will do though, Matt, is we’ll shoot those over to you. We have been recording this webinar. I know that you would reply to those in the next couple of days. We’ll get this posted to Bplans.com. We’ll have the questions on there as well as the answers and the video so you can watch it any time.

I know there were a few of you that weren’t able to watch this with your business partners, and you wanted to have them join in. So you’ll be able to get to do. Matt’s offer to sign up for his newsletter and email him directly, he means it. He’s very personable. It’s really awesome to be able to have a direct line to a CEO who has built an awesome company, an awesome culture and making himself available. Thank you again, Matt. Thank you, TSheets. Thank you everybody for tuning in. Take care.

Editor’s note: Since publication of this update, our Scoreboard feature has undergone a change, and we now call it the Dashboard.  

One of the most important things a startup can do is make sure that they are keeping track of their data. In this webinar, we take time to discuss the different metrics that startups—and established businesses—should be tracking.

Tracking metrics and making sure you know what’s going on with your business is crucial; it enables you to determine if your assumptions about your business are correct, if your financial and marketing strategies are working, and ultimately allows you to make the best decisions possible for your business.

The full audio and slide deck are included above, and the full transcript below.

Sabrina: The first thing I want to really talk about is how I came to what I needed to track as the CEO of an online SaaS company and why it’s really important. As you guys go out and are pitching investors, have gotten some investor money, as you guys really go out there talking to the investment community, whether it’s angel investors, whether it’s larger VC funds and VC firms, it’s going to get you a lot further if you can focus in on data.

Not just that, if you can present and you can understand all the metrics and all the data that you should be tracking and then you can use that data and those metrics to put together financial forecast and financial models that makes sense, then you are going to have more success when you pitch and you’re also going to put yourself on track to be able to understand what’s actually attainable and achievable.

What a lot of companies or startups don’t realize is when you put up forecast together, it’s difficult if you’re a startup. It’s hard to understand how many people will you actually attract, what is it going to cost, what’s your conversion rate, how long will people stay. Those things are all really hard to just get. The more that you don’t guess, the more that you use data that you can find from similar companies, competitors, public companies, the more that you can understand and apply similar metrics as you go and really put your financial model together and pitch, the more likely that you’re actually going to make those metrics.

Because what happens is pitching is going to take eight to 12 months. As you pitch, somebody might be interested and time marches forward. As time marches forward, you’ve pitched that you’re going to hit certain milestones. If you don’t hit those milestones with an interested investor, it’s very likely that they become less interested. It’s this tough position to be in and that you want to paint a really positive picture in your financial modeling and you want to show this big opportunity, but you also have to put numbers out there that you can actually achieve. Because if you don’t achieve your numbers, then you basically are validating why somebody should not invest in you.

We’re going to jump forward here in the slides. The reason you want to track is all about knowing your business. The key performance indicators give you that pulse of your business. You can use that data to make better decisions. You can understand missed assumptions and you can understand levers that can make a difference. All of these things are also really important when you’re trying to get VC funding and angel funding. You need to be able to quickly identify missed assumptions and then apply those to your financial modeling and then talk intelligently about why you may have missed assumptions. You need to track pre-purchase, post-purchase, and then overall business analytics.

In terms of pre-purchase, traffic and content metrics. You need to really understand how you’re going to drive traffic to your website and how traffic funnels into your site because at the end of the day, if you build everything correctly, you will have a funnel where more people come in at the top and as they go through your site and get closer to purchase, they will narrow down and funnel through until you actually get to that conversion rate and somebody buys your product or your service.

You need to be really well-versed in top referrers, unique visitors, keywords. If you have pay-per-click campaigns, you need to understand how they’re doing, how much money you’re spending on them, which of your keywords if you’re using a pay-per-click campaign are working, which ones are not. You need to also understand calls-to-actions. I’m sorry, the slides seems to … the calls-to-actions be a little jumbled at the bottom, but basically inbound marketing strategies that use graphics and text to draw those users down. You should never have a landing page from any sort of paid advertising that doesn’t have great calls-to-action.

Every time you think about a user landing on your website, you need to understand visually as well as from a functionality perspective what you want that visitor to do on that page. Depending on your price points and what you’re selling, what you might want is for somebody to fill out a form and give you their contact information. In other cases, you might actually want somebody to click the “Buy Now” button and go through a shopping cart and purchase something. In another case, you might just be gathering leads and you might just want them to sign up for a newsletter.

Every single page you have on your website needs to have a purpose and needs to have a functionality for that customer or that visitor. Every time somebody gets to a page in your site, they need to be able to intuitively understand where you want them to click and what that call-to-action is, which means you won’t attract everything. Because if you think the purpose of a certain page is to get people to click the “Buy Now” button, but at the end of the day, everybody is clicking the “More Information” link, that tells you a lot of information and it gives you a ton of information.

One of the biggest mistakes people do is they are trying to build things very quickly and as you put together forms, integrate newsletters, and email marketing tools, integrate shopping carts, and different eCommerce tools, oftentimes people don’t put the proper tracking in place. You can never go back and track something you didn’t set up to track from the first place. All you can do is fix it going forward. You can’t go back and change the history of tracking. All of us in this game are always coming to this point where we say, “Damn, I wish I had tracked that and I didn’t, and now I’m going to start tracking it.”

Here’s how to prosper with LivePlan and with our websites, it’s a constant game of making sure that we’re tracking everything we want to track, but the better we get at it, the less we leave on the table. You want to always track more than you think because as long as you have that and you have the data, then you can go back and figure out what you want to do with the data. If you don’t have that data, then there’s nothing you can do and the only thing you can do is change the future.

In terms of driving traffic in the pre-purchase funnel, you will want to separate your funnel between paid traffic and SEO traffic. You’re going to want to really think about how you’re going to drive traffic and what’s most cost effective. In general, getting organic listings and using SEO can be the most cost effective, although in some areas it’s a tough game to be in. If you’re in a really crowded area, let’s pretend one of you is selling flowers and competing in the online flower market, it’s going to be really hard to rank in search engines. Then when you go on the pay-per-click side and you try to buy pay-per-click ads, it’s going to be very expensive. Those keywords are very, very expensive.

You just really need to know and understand your market. I’ve seen people pitch companies and they put together a budget of what they’re going to spend on online marketing and they’ve never once gone and used the Google AdWords tool to actually investigate what keywords cost. It’s a huge mistake because if I can go and I can investigate all these metrics and I can investigate what keywords cost and you’re telling me that you’re going to spend $10,000 a month in keywords and that $10,000 a month is going to drive a thousand people to purchase your product?

So I’m going to keep going here, “Pre-purchase, the traffic and content metrics.” How can you make sure you’re driving the most traffic to your site? I talked a little bit about what you’re going to actually think about: top referrers, unique visitors, keywords, pay-per-click campaigns, calls to action.

I talked a little bit about how everybody should investigate the SEO and the pay-per-click landscape and Google AdWords can give you a good sense. From an SEO perspective, you can go and use Google Tools and find out how many people search on certain keywords. For instance, if you got a perfect keyword that you think is just exactly what you want to show up first for if someone searches for it, but then you go to Google and you find out that only 500 people a month search on it, you need to find more keywords.

You need to get to a point in your funnel where you have enough people coming in that you can get to that conversion rate that will get you the sales that you need to drive your business forward. There’s tools to do all of that. There’s no reason and there’s no excuse to be able to not have this information with you. Don’t go in and pitch anyone if you haven’t investigated this. Understand the volume of keywords, understand what it costs for pay-per-click for the keywords that you want, understand who you have to battle in the organic search landscape in order to appear on the first page of results. At the end of the day, just so you all know, page number one is all that matters. Being on page two doesn’t matter.

I mean think about your own search habits. Unless you’re looking for something very specific that you know you want, you’ll never go to page two of results. If you can’t get on page one of results organically, you’re going to have to pay to be there, and that means you’re going to have to understand how much money it’s going to take to pay to be there. All that money that you spend in pay-per-click is going to go into your customer acquisition cost.

How are you going to do this and how are you going to know that you’re driving not just the most traffic to your site, but that you’re also doing the most with that traffic? You’re going to want to A/B tests. As you put landing pages together on your site, landing pages meaning where somebody lands when they get to your site and it’s not always on the home page. Oftentimes they land somewhere else because of keywords or because you’re driving them there through pay-per-click campaigns. If you have a pay-per-click campaign that’s focused on, for instance, we’ll go back to flowers.

If I’m searching on flowers, I find your ad, your ad says “best online flower delivery” or “fastest” or whatever it says, and I click on your ad and I just get to your homepage, you’re probably going to lose me. If I click on the ad and I get to a landing page that continues to talk to me in the same messaging, “fastest delivery, get it today, same day,” then you have a better chance of still getting me. That being said, there’s many ways that you can put that landing page together. You can put the call-to-action at the top of the page. You can put it at the bottom of the page. You can put some testimonials around it. You can put some pictures. Different things are going to perform differently, which is why you need to do A/B tests. That will simply mean you have page A and page B and you send half your traffic to page A and half your traffic to page B and then you see what happens.

Don’t make the mistake of making page A and B so different that you’re not even sure why one works better than the other. Make sure that you have two pages but that you understand the variables that you’re testing, and don’t test 20 variables and don’t test things that are so dissimilar that you don’t even know how many variables you’re testing. You’re going to want to think about time to purchase. When people come to your website, do they purchase within the first visit? Do they come to your site, think about it, leave, come back, think about it some more, come back? Does it take three visits to purchase? Does it take one visit and five minutes? Does it take five visits and two hours? Think about how are you going to measure all of this.

Shopping cart tests. You need to experience with the functionality of shopping cart features. To this day, shopping carts are where most customers drop out, and of course, they’re not customers. Just think about it from the perspective of a real brick and mortar store, because oftentimes we don’t think about it this way and we’re not measuring and we’re not really even understanding.

What if you have a real physical store, customer comes in the door, puts all kinds of things in that shopping cart, walks around, and somehow, before they get to the cash register, the customer leaves, but they put things in the cart. In a real brick and mortar store, that wouldn’t happen. People don’t go in to stores, put things in carts and then abandon them and leave.

I mean it might happen 5% of the time, but the shocking reality is in a lot of online shopping experiences, you’re seeing shopping cart dropout rates of more than 50%. Imagine walking into a grocery store and finding half the people in the store putting items into the cart and then walking out and you just see carts full of stuff all over the place. That’s what’s happening online. When you pick out what shopping cart you’re going to use, think about the functionality you want and then test things. It’s not always the most beautiful looking shopping cart experience that works.

Then think about how you use shopping carts. On Amazon, I don’t put anything in my cart that I’m not going to buy because I know what my shipping is going to be, because I’m an Amazon Prime customer. I only search for Amazon Prime items and I know I get free shipping. When I put something in my cart, nine times out of 10, it’s because I want to buy it. When I go to another site and I don’t know what the shipping is going to cost me and they make me put things in the cart and then put my zip code in before they tell me the shipping, it’s very likely that eight times out of 10, I’m going to abandon my shopping cart because all I’m really doing is understanding how much that item is going to cost me at that particular website.

Just think about all these different things that go through a shopping experience and be able to test them and get your data. When you retarget and remarket, it’s using tools that basically cookie users, and then as they visit other sites, serve them ads again. Google has great remarketing and retargeting. In fact, if you haven’t gone to LivePlan.com, you should do so just because you can then experience all of our remarketing and retargeting.

I’ve had friends who’ve told me, “Why are you advertising on tennis websites?” We’re not advertising on tennis websites. I’m advertising to my friend because he came to my website. Once he comes to my website and he goes to another website, the LivePlan ad follows him around because the more times you see the LivePlan ad, the more likely you are to click on it and buy.

Click-thru-rates. Pretty simple, everybody should understand them and it’s something that if you can affect positively, you can make a huge difference on your funnel. If you can get more people to click at the very top of the funnel, then you get a better chance all the way down the funnel to convert them. Obviously, at the end of the day, the eCommerce conversion rate, how many people end up purchasing, it’s what you’re going to end up using to actually track your customer acquisition costs.

I’m going to pause here for a minute and make sure you guys don’t have any questions. Peter, anybody have any questions as I go along?

Caroline: It would also be great to know if the entrepreneurs in the room are tracking any of this right now, the metrics that Sabrina has already talked about. He’s saying as of now we’re good. Okay, so great. People are tracking what you’re talking about so far which is great.

Sabrina: Great. Post-purchase—looking at the numbers. What was the cost of obtaining the customer? Everyone should know their CAC. It’s something that is going to drive your business. It’s also something that investors very often look at. At the end of the day, if it costs you $300 to acquire a customer and you’re only going to get a $150 from them, you can make your case that eventually you can drive the costs down and that eventually as you get more traction and you get more brand awareness, it will only cost you $40 to acquire the customer, but it’s a lot harder sell.

Now, you’re selling an investor on the idea that eventually the CAC will be lower. The lower you can get your CAC, the higher you can get your lifetime value, the better off you’re going to be. Obviously that sounds obvious, but it’s amazing to me how many times people aren’t really fully aware what their CAC is. You’re going to want to look at your CAC in terms of pure spend, in terms of advertising pay-per-click and driving traffic, as well as a blended CAC in terms of actual resources internally, so you could have some fixed cost on people and you’re going to have some variable costs in advertising.

Hopefully, all your advertising cost are variable. I would not advise anyone to do any sort of advertising that’s not pay for performance where it’s variable based on an action you want someone to perform. These days online, there’s no need. Don’t do any CPM deals. Don’t do any advertising deals where you’re paying a fixed amount and you don’t know what the results are going to be. Then understand the months to recover your CAC or the years or the purchases. You need to understand these metrics because those are your drivers and those are what you can affect, and it may be that you need to raise your prices once you really understand your CAC.

Okay, some more “Post purchase—looking at the numbers.” What is your customer worth? Another thing that investors will always ask you besides CAC, and I always—the CAC is so important, and to me it always sounds like I’m like a cat with a hairball or something when I say CAC, but CAC is important and you need to understand it and you need to try to figure out how to keep your CAC as low as possible. It’s what’s going to make you most attractive to an investor. The other thing that they’re going to ask you is average revenue per account or per user or per customer. ARPA or ARPU is usually what people call it.

You need to understand how much money is brought in by each individual account or user when looking at the overall revenue. That’s going to be a per month is the way most people look at it. If you only do annual sales and annual subscriptions or annual accounts, then you can look at it annual, although you can still divide that by 12 and break that down by monthly. You can have a yearly ARPU or ARPA. You probably want to have a monthly one though because all your other expenses for the most part are monthly: rent, salaries, all your fixed costs, insurance.

Really understand what you are projecting for your ARPA and your ARPU. When you look at SaaS metrics, keeping your CAC low and increasing your ARPU is going to be the fastest way to the hockey stick that SaaS companies are trying to achieve. Lifetime value will also get there and you increase your lifetime value by decreasing your churn rate, i.e. the rate at which people churn out of your product or service, but decreasing your churn will take months to catch up and show the bottom line and your absolutely want to decrease your churn. You want it to be as low as possible.

If you look at a company like Salesforce, their churn is down at minimal, like 1% a month. A company like Constant Contact has a 2.5% churn per month. You need to go out there and look at industry standards for the industry you’re selling to, and whether you’re selling consumers, small business enterprise, and understand the churn rates, and driving your churn will ultimately help drive that hockey stick, but if you want to quickly increase your revenue every month, you got to increase your ARPU as well. If we increase our-

Caroline: Sorry, to interrupt you. There’s a question posted from Jill at [inaudible 00:23:46]. Are you seeing it there or do you want me to read it to you?

Sabrina: Yeah, I see it. Average cart size, average order value, so yes, it depends on subscription metrics. Usually selling software as a service is sold in a subscription and it’s not a transactional purchase. ARPA and ARPU is if you’ve got a subscription model and it’s what you, on average, charge every customer every month. Whether you do annual accounts or not, you can break it down. For instance, at LivePlan, we sell LivePlan for 19.95 a month, but we also sell annual accounts at a 139. Our ARPU is less than 19.95 because of the annual accounts. Our ARPU is, I think, currently about 18.37.

That’s the way we look at it and the more that I can increase my ARPU, if I could increase my ARPU from $18 to $25, from one month to the next, which I’m not going to do because we’ve got 55,000 customers paying an average of $18 right now. Let’s say I could magically just tell them all the prices have been raised and nobody would cancel, I could immediately bring in $500,000 more a month if I could raise my ARPU just a few dollars. The average cart size and average cart order value can be the same as ARPU, but traditionally you use average cart order when it’s a transactional business where somebody’s coming in and buying something and they may or may not be back and you don’t have the credit card on file to keep charging them. Hopefully, that helps answer that question.

Lifetime value is how long the average user will stick around and how much revenue will this bring in. If you look at something like Constant Contact with a 2% churn rate, their customers are going to stick around something around 36 months. On average, they’re charging people 20-some dollars a month so you can do the calculations based on hundreds of thousands of customers. If they can keep a customer for five more months and they’re charging 20 bucks a months, that’s a $100 more dollars per customer. You definitely want to do lifetime value.

Ways to increase lifetime value. Obviously, providing more support, keeping your ratings high, staying in touch, segmenting customers, create a sense of urgency to use your products and services. The other thing is in order to do all these things, providing better support, you need to be tracking things. Why are people canceling or not putting things in their cart? Maybe you start to notice a pattern that if you can get someone within the first week to click on these three things within your product or your service, you know that they’ll stick around for an extra three months. Then you got to focus in on how can we get more customers to click on these things.

Do we do in-app messaging, do we call them, do we send them an email? The other thing you need to understand as you look at lifetime value and churn is what happens when you contact your customers. You have to make a decision if you’re doing a subscription service, are you going to send an email receipt every month when you charge a customer, or are you going to do the Netflix route and when they sign up and they agree to the $10 a month, you’ll never say anything to them again and they you’ll just quietly charge them month after month? It’s all a decision that you and your founders have to make and it’s a decision that will ultimately affect how your business is run and how your customers look at you. It’s worked for Netflix, although they have some pushback.

If you look at Apple and iTunes, they tell you a week before they’re going to charge you that they’re going to charge you. We’ve chosen to go in the middle of those two at LivePlan. We send you an email receipt when we charge you every month. We never charge you without sending you an email receipt, but we don’t quietly charge you. It’s a decision we’ve made. We’ve also noticed that if we email our LivePlan customers too much, we get more cancellations for many, many reasons.

Caroline: Sabrina, there’s a question and I just posted that we’re using Google Analytics and KISSmetrics, but what types of tools do you recommend to track all these data?

Sabrina: Yep, Google Analytics and KISSmetrics are exactly right, what we use in terms of our conversion funnel. We also use Optimizely and then we’ve got some home-built A/B testing software that we’ve actually—tools, not software—that are our web developers have built. Before we used KISSmetrics, we used Totango. KISSmetrics and Totango measure engagement and activity. You need to understand your app and what you’re building and look at tools that will measure paths that people take and actions, versus Google Analytics is more of a flat measurement and they can do some in-app measuring.

Google Analytics is mostly looking at the way people move through a site and click on links, whereas KISSmetrics gives you a more 3D type of look of paths and clicks and activity and engagement in a more 3D way, I guess is the best way to describe it, so yeah. Thanks, Caroline. The example, percent of people who buy your product within their first visit to your site, so…

Caroline: That’s, what tool would use that? Is that KISSmetrics that tells us when people buy?

Sabrina: No, that’s Google Analytics and hooking it up correctly to our cart. That will tell you what happens when people visit and when they purchase. When we measure things like feature usage and how that correlates to cancellation, that would be KISSmetrics. I am happy to work individually with any of the companies and help guide them to the right set of tools or the right category of tools. In terms of how much traffic would a site need for retargeting to be beneficial, I think what’s more important is what you’re going to pay for the retargeting and remarketing. I don’t think it necessarily matters how much traffic if you only pay for performance, then you’re only going to pay for the retargeting that actually performs.

I think it’s more about finding enough traffic to get to right conversions and driving enough people to actually get the revenue you need to run your company, but retargeting can work at any level, right? If only one person a month actually purchases based on retargeting but you’re only paying for that click or 10 people click and one person purchases, well then that’s probably pretty affordable. If 50,000 clicked and only one person purchased, that’s not very affordable.

It’s more about the results than the top of the funnel. It’s more about how much are you paying and what your actual conversion rate. What we do at Palo Alto Software is we actually set some metrics of return on investment in pay-per-click across the board, so for retargeting, remarketing, all of that. If we don’t get at least 180% return, we don’t buy those keywords. That means for every dollar we spend, we get at least $1.80 in return. Sometimes we get 300% ROI, so we’re getting $3. I’d rather get more people in the door and get $1.80 than be way up at 300% and get less people in, but pay-per-click doesn’t always work that way.

Sometimes the more money you spend, the less your ROI. You’ve got these perfect points in a bell curve and like where your sweet spot is, and if I could just keep spending money at $1.80 return, I would do that but I can’t. At a certain point, there’s a diminishing returns. You’ve got to be able to set up your tracking so that you can find those levers and knobs to turn back and forth and you can understand your funnel and basically that faucet of pay-per-click.

Caroline: Just to do a quick time check, we’ve got about 10 minutes for the rest of the webinar.

Sabrina: Okay, we’re almost at the end here, so I’ll go pretty quickly here and then I’ll let you guys ask some questions.

Again, knowing your users, looking at the members, cohort tracking, segment your users based on different variables and track their attention and engagement of these groups. For cohort tracking, you’re going to need something like KISSmetrics or Totango. You got to want to track cohorts of basically when they sign up, so we have our 3-month cohort, our 6-month cohort, our 9-month cohort, i.e. people who have been paying us for 3 months, 6 months, 9 months. We have our cohort of scoreboard users in LivePlan. We have our cohort of benchmark and scoreboard users, etc. etc. etc. Then churn rate, like I talked about, churn rate will directly affect your lifetime value.

 Caroline: Sabrina, are we using GA to conduct cohort analysis or is that KISS?

Sabrina: No, that’s KISSmetrics. You could, if you simply have an eCommerce site that sells transactional product, you can use Google Analytics, but if you got an online SaaS app where people engage and spend time on the product and do different things, you’re going to have to use something like KISSmetrics or Totango. GA can do a little bit, but it just isn’t enough. If you’re going to do real cohort analysis within an online app, you’re going to have to use something in the category of KISSmetrics and Totango. There’s other competitors. We’ve used both KISSmetrics and Totango. We like KISSmetrics better, but I was just talking to a partner of ours yesterday who uses Totango and likes that better.

At this point, I’m not going to go into the rest of the business analytics and the financials until I see whether there’s any other questions because there’s only 10 minutes to go. I can go a little over time if you guys, Peter, can go a little over time. Hopefully you guys can all still hear me. Okay, so you guys can go a little over time. All right, well then I’ll jump in.

We’ve talk a lot about the online metrics. The other part that I find people know they should track but don’t always track really carefully, and again when it comes back to your investors, as the founders, you need to know these numbers back and forth. Once you start making some revenue and you’re actually charging customers, you’re going to have to be able to answer all questions: what’s your burn rate, what’s your CAC, how much money do you have in the bank, what is your average AR and AP, what are your direct costs, what’s your net profit, what’s your EBITDA?

I know I’m talking really quickly and throwing out a lot of terms. That’s what’s going to happen, that’s what people are going to do, so you’ve got to understand, know, and get to love your numbers. The more that you get to understand and love them, the more that you can use the data in terms of your financials as well as all the backend data of what people are doing through your different funnels and within your app to make the right decisions.

A lot of times people talk about gut feel and a lot of entrepreneurs have to use gut feel. It’s part of what you did when you jumped off that cliff and decided to be an entrepreneur. It’s good that you have some of risk and you’re willing to just jump off that cliff and do it, but the reality is these days, as you run online businesses, there’s so much data that you can use to make your decisions to cut down the gut feels and to be making the right decisions.

Sales is obviously the company’s paycheck. Your sales represent your financial future, your product or service, and the number one indicator of how my business is doing. It’s not just about sales overall; it’s also about being able to answer all those questions about your sales. What line of product or service do you sell best? Which one has the lowest direct cost? Why have you predicted that you can sell more of product or service A than B? As you start to sell, are you above your forecasted pace, are you below it? How do you compare to previous periods? All of these information is going to help keep you on track and help make decisions.

As I was mentioning, sales aren’t free. The more you sell, the more your cost are going to go up. That’s okay as long as your CAC and as long as your fixed costs are lower than the money you bring in. It sounds pretty obvious, but a lot of times it’s not. Think about it. A lot of times people aren’t tracking everything they should in their direct costs. Anything that’s a cost of goods, hosting for instance, any maintenance contracts that you have, if you have to pay license fees for any of the technology, a lot of those will be your cogs, if there’s some monthly fees. The more you sell, the more you have to pay directly in combination with each other. You could also go online and Google this in your industry and find out what other people put in their direct costs.

Manufacturing companies often put labor as a direct cost because it costs them per hour to pay someone to manufacture. We, on the other hand, don’t have labor in our direct cost at all because development is not a direct cost. You have to understand what your industry does and then track everything the way your industry tracks it. If you don’t, what happens is then your gross margins will be off and when you send your financial models to investors, they’re going to catch it and then they’re going to want to know why your gross margin is different than what they’re used to. If it’s just simply that you’re not putting the right things in your direct cost, that can make you look bad.

Caroline: Sabrina, just to hop in. I wanted to remind you that all of these companies have access to LivePlan, so they’ll be able to track everything that you’re talking about here in the Business Analytics side, as well as there’s a SaaS forecasting tool where they can plug in their churn and things like that.

Sabrina: Great. If you guys have questions about any of this going forward as you’re putting together your financial models, as you’re tracking, we’re definitely available as mentors and we’d love to work with you.

Again, gross margin is exactly what I was talking about. If you haven’t figured out your direct cost correctly, your gross margin is going to be off and it’s just going to be harder to compare your business to similar businesses and it is going to throw your investors off.

You may have a gross margin that’s phenomenal and that might be part of what you’re bringing to the table. You can produce something at a lower cost than everybody else because it’s some patented technology, it’s some innovation, and that’s fantastic, but if that’s the case, be educated about it so you can talk about that and you can use that as a selling point in your pitch. “Our gross margin is 15% better than anyone else in our industry because we’ve discovered this new way to manufacture this certain material that we’re then using to build our product.” Just knowing how your industry measures things, what they put in direct costs, how they configure their financials is going to be really helpful when you pitch.

Budget wisely, plan for seasonality or change over time, and anytime you can, drive your expenses to be a direct result of sales. Tie your cost anywhere you can in a variable way. You’re always going to have fixed cost. Rent is going to be the same, insurance is going to be the same, a lot of salaries are going to be the same, but if you can have—you have salespeople, their salaries, hopefully, are commissioned and so those salaries, maybe they have a small base and then everything else is commissioned, but then that gives you that nice variable that you pay when they sell. They don’t get the commissions unless they sell. As much as you can tie expenses directly to sales, the better off you’re going to be. Let’s see, I was just checking if there’s any…

Caroline: I was just posting that they can invite you in as a guest into their account so that you can help them with their SaaS forecasting.

Sabrina: Yeah, absolutely. I’m really happy to do that. You can see here on our scoreboard, which you guys have available to you, you can really track on your expenses, actual results compared to forecast, previous period, previous year. These are all really useful metrics. One of the reasons you want to track all of this is it does help uncover where you may have problems in your business. If your salary expenses are way out of whack from one year to the next or compared to your industry, you need to know and you need to fix that.

Again, data is great. You should never have to wonder what you should pay people. You should be able to go out and investigate and get the data on salaries in your region and in your industry. As a startup, you should be on the lower side of that because you should be giving some equity to the people that you employ.

Sales and expenses, obviously, check frequently and together. If your expenses are up but so is your revenue, then that’s probably okay especially if you’ve tied your expenses as much as possible directly to your sales.

Sometimes people will look at just their expenses and they’ll freak out because they’re not sure why they’re up but then it turns out the revenue is up. In this view, you can see that this customer is on pace to make $186,000 for the quarter when their target was $160,000. Their expenses are on pace for $132,000 when their target was $121,000. Well, they’re still in good shape, right, because their revenue was higher than expected and so are their expenses. Don’t forget to look at things together that should be looked at together. It’s going to help you from panicking, and again, data makes you sleep better, data helps you make decisions. It helps you get away from that gut feel.

Cash, obviously, this is the most important part of business. Don’t confuse cash on hand with profit or what’s in your accounts receivable. Know your billing and payment cycles and understand that profitable companies can fail if they run out of cash. If your accounts receivable days are 90 days out, on average you collect in 90 days and the rest of your industry collects in 20 days, you have a problem. If you collect every 90 days but your industry on average collects every 100 days and you still have a cash problem, you’re not going to be able to fix your cash problem with AR because you already collect better than everybody else.

You’re going to have to figure out other places to fix your cash or you’re just going to have to make sure that you get enough investment or line of credit to be able to withstand your AR days. When you go out and you ask for money, no one should be asking for money who hasn’t done a cash flow forecast. The only way you actually know how much money you need is to do your revenue forecast, your expenses, your cash assumptions, how much do you get in cash versus in AR and AP, what are your AR days, what are your AP days. You can do this all on LivePlan.

Then you’re going to get a cash flow forecast that’s going to show you when you go negative. When you see a negative cash balance, that means you will be bouncing checks if you don’t get investment or loan. Don’t ever go out and ask for money if you can’t show a cash flow forecast that validates your use of funds.

Net profit, obviously at the end of the day, the true bottom line. Does your company make more than it spends, do your profits fluctuate? A profitable company is really the only type of company that stays in business. As a startup, you can stand to go a certain number of months and years without making profits, depending on your runway in terms of investment. Some types of companies, medical device companies, need millions and millions of dollars in investment because they won’t be profitable for seven years, 10 years, because they’ve got some sort of FDA approval and clinical trials and animal trials and human trials. Different companies can withstand and have models that make it okay to not be profitable for many, many years, but for the most part we’re all working towards making profitable companies.

Really, we’ve gotten to the end of the presentation. Know your business, what to track, some other metrics. Obviously, at the end of the day, I wanted to just put some examples of types of metrics that businesses should be tracking. The reality is so many businesses I talk to mean to track things and at the end of the day, they get so busy running the company and they’re running so quickly to get everything built and if they’re pitching at the same time and trying to get investors, that’s another full-time job in and of itself.

It can be easy to not have the discipline to put everything you need in place to do all your tracking, but I guarantee you, if you can focus in and take some time and put all your metrics in place and make sure that you track things the way you need to, your business is going to be better off. You’re also going to need, if you can do that, you’re going to show your investors that you’re in a better position to run your business. It also means, by the way, that from a financial point of view, you need to set up your accounting software correctly.

Let’s assume you’re going to use QuickBooks or Xero or Wave or an online accounting software, think about all the things you want to track and set your accounting software up correctly. If I track LivePlan and put into my accounting software only one revenue line for LivePlan, and then I want to understand how many people bought through the website versus through our banking partners versus through retail, and I’m not tracking them in my accounting software, it’s going to be a lot harder for me to run the reports that I want as the CEO.

Every step of the way you’ve got to think about what are the things I want to measure and track, what are the levers that’ll help me make decisions and set up your process and your backend analytics and your financials in the right way so you’re tracking everything you want. You’re better off tracking more and then later consolidating than tracking less and realizing later that you don’t have the data that you want.

I’m going to leave this summary “Track for Success” up here. Managing the data gives you the real information. Tracking versus your plan helps you understand where your assumptions are wrong. If you think your CAC is going to be $20 and you start tracking things and your CAC is $75, you want to know that as soon as possible. The best way to know that is to track it and to put it up against what you thought was going to happen and then you can quickly adjust and make the changes that you need to do.

Thanks, guys. I really appreciate the time to present and I really love to touch base and help out entrepreneurs, so don’t be shy. Get in touch if you have anything that you think we might be able to help you with.

I recently posted a question to the Small Business subreddit asking, “What are some of TV’s most famous small businesses?” The group offered up some great ones, like the junkyard from Sanford and Sons, Dunder Mifflin Paper Co. from The Office, or Central Perk from Friends. The conversation inspired me to start putting together some lists.

You may have already noticed, but Bplans.com has over 500 free sample business plans available online. Over time we’ve been able to see which industries are the most frequently searched-for on our site. So, I thought, “Why not combine these?” I’ll take a frequently searched business category from our website, and show what I think are the most famous examples of those businesses from movies, television, or books: Small Biz Pop Culture.

One quick caveat: this is a list I created, so it is bound to be subjective. If you think there’s a more famous example that I didn’t include, tell me in the comments.

Without further ado, here’s today’s list: The 5 Most Famous TV Bars.

5. Emerald City Bar (Joe’s Bar) – Grey’s Anatomy / Private Practice

Featured in seven out of ten seasons of Grey’s Anatomy, and in one season of the spin-off show, Private Practice, the Emerald City Bar is the go-to place for the Grey’s Anatomy characters to blow off steam and grab a drink.

Joe, the bar’s owner (played by Steven W. Bailey), offers the doctors from Seattle Grace Mercy West Hospital a listening ear, some sage wisdom, and liquid libations.

From a business perspective, a bar right across the street from a hospital makes for a great opportunity to reach a regular customer base, but owning a bar in downtown Seattle is not cheap. According to BizBuySell.com, you won’t be able to buy one for less than $300,000. Even so, with a regular stream of highly paid neurosurgeons coming through your doors, you may be able to charge more for that Jack and Coke.

4. Ten Forward – Star Trek: The Next Generation

If you want a futuristic atmosphere, look no further than space: the final frontier. Ten Forward is the bar/lounge hurtling through deep space aboard the starship Enterprise.

After a long day of exploration and intergalactic diplomacy, the crew (led by Captain Jean-Luc Picard, played by Sir Patrick Stewart), can head down to the bar on Deck 10 and kick their feet up. Whether they’re retelling battle stories or debating the finer points of the Prime Directive, Ten Forward is a great place for the crew to develop camaraderie and boost morale during their long voyages. And of course, it’s given us this gem of a TV moment:

3. MacLaren’s – How I Met Your Mother

“Kids, let me tell you the story…” of MacLaren’s bar, the regular watering hole for Ted, Robin, Marshall, Lily, and Barney in How I Met Your Mother. The bar is owned by Carl MacLaren, and located below Ted’s apartment. Throughout all nine seasons of the show, MacLaren’s is a regular hangout spot for the gang to talk about their day (or be forced to hear about Barney’s latest conquest). In the final season of the show, it’s revealed that Carl MacLaren has plans to pass the ownership of the bar onto his son, making it a true family business.

Set in New York, MacLaren’s would not be a cheap family business to own. In 2009, New York Magazine calculated the “Bar-onomics” to run a profitable bar in the East Village. Their estimate? $200,000 in startup costs, and a required 18-month total gross income of $645,000 before turning a profit. It’s not clear how much the costs would differ on the Upper West Side of New York, where MacLaren’s is located, but it’s safe to say that it wouldn’t be cheap there either. Still, it’d be hard to imagine How I Met Your Mother without MacLaren’s, so I won’t think too hard about whether the bar could stay afloat.

2. Moe’s Tavern – The Simpsons

Moe Szyslak is the owner of Moe’s Tavern, in the fictional town of Springfield in the animated series, The Simpsons. The series is moving into its 26th season, and Moe’s Tavern has been around since the very first episode, which aired on December 17, 1989. Moe’s is a second home to Homer Simpson, and is a mainstay for Springfield’s working class patrons like Carl, Lenny, and Sam. The bar’s most regular customer is the town drunk, Barney, and Moe’s is also a recurring target of Bart Simpson’s prank phone calls.

For over two decades, Moe’s Tavern has gone through various name changes and redesigns as Moe attempted to make his business more profitable. There was Uncle Moe’s Family Feed-Bag, Mo’s, M, Flaming Moe’s, and even Moe’s Pet Shop. Yet, after all these years the bar has remained relatively unchanged, from the darkly lit interior to the same guys occupying the barstools. There’s something comforting about that.

Despite being a regular fixture in TV pop culture for the last 26 years, I still don’t think Moe’s Tavern is TV’s most famous bar. That’s a designation reserved only for…

1. Cheers – Cheers

Running for 11 seasons (1982-1993), Cheers certainly isn’t the longest running TV show on this list. However, its cultural impact remains unmatched. Both The Simpsons and How I Met Your Mother have paid homage to Cheers, and the theme song, “Where Everybody Knows Your Name” runs deep within the collective consciousness of American culture.

In the show, the bar is owned by former Red Sox relief pitcher, Sam Malone. Cheers is a melting pot of upper and lower class characters, from U.S. postman Cliff Claven and accountant Norm Peterson to the psychiatrist Frasier Crane (who later got his own 11-season spin-off TV show). The show launched the careers of Ted Danson, Kirstie Alley, and Woody Harrelson. It was also a critical success with over 100 Emmy nominations and 28 wins. The 1993 series finale brought in over 80 million viewers, making it the second highest viewed series finale in TV history. There’s no doubt in my mind that Cheers is the single most famous TV bar.

Have you ever thought about opening a bar? Would it be a Bar and Tavern like Moe’s or Cheers, an Irish Pub like MacLaren’s, or something else entirely? While you’re here, take a look at our Bar and Night Club Sample Business Plans to find the one you’re looking for—you can even download it for free.

Do you think there’s another TV Bar I should have added to this list? What business category should I highlight next? Post a comment and let me know!