CEO Lessons: Bulls**t Mission Statements, Firing People & Saying ‘NO' (#505)

Shaan Puri

When moyes was selling native deodorant he didn't own the trademark

Sam Parr

and it was an issue

Shaan Puri

He's got the deal done and they're like, "Wait, you don't have the trademark?" He's like, "Yeah, but there's no other native deodorant." They're like, "Okay, junior, what are you talking about? That's not how this works." You know? Alright, today.

Sam Parr

We thought it would be fun to do an episode all.

Shaan Puri

About how we actually run our companies. We've been running companies for, like, I don't know, 10 to 15 years now. Like many people out there, at the beginning, we did a bunch of dumb stuff. So, we're going to admit and confess to some of the dumbest things that we did while running our companies. Then, we'll talk about what we do now that actually works. This discussion will cover everything from mission statements—how we used to think they were super important and how we treated them—versus what we do now, to branding, naming our companies, and goal setting. These are kind of the shortcuts that we use now. So, what we found works through the painful process of making embarrassing mistakes—that's what I think we're going to do today.

Sam Parr

Yeah, we have about 5 or 8 categories, like hiring, creating compensation plans, and having boundaries with staff. These actually sound boring when I'm just reading them off, but I promise you, we have interesting stories behind each one and things we wish we would have done earlier. I deeply regret not doing them then. But yes, we'll go through all the stuff that we actually use on a day-to-day basis to run our companies. The touchy-feely stuff is actually really important.

Shaan Puri

So, I thought it'd be fun for us to share things we do when we run our companies. What are our management hacks, shortcuts, or methods that we use? As a disclaimer, these are probably not the best practices. They might not be what they teach you at Harvard Business School or what, you know, very polished, seasoned executives would do.

Sam Parr

I remember when I started one of my early companies. My internal mission statement was to hire 10,000 people. Then, I hired like 2 people and I was like...

Shaan Puri

shit does that make

Sam Parr

You a new racer? Yeah, yeah. Like, how do I make this 10? It was horrible. And then the mission statement for the employees is like, "Look, we're gonna change whatever." Like, right now the word is "democratized." We're democratizing the financial markets or whatever. It's like, yeah.

Shaan Puri

oh my god

Sam Parr

Whatever that equivalent is, is what I said. Like, "We're gonna change the world one newsletter at a time." And so, my mission statement.

Shaan Puri

did you really say that

Sam Parr

No, but it was probably lame. I don't... that'd be the worst if I said that, but no, they're pretty lame now. They're way more... So here's what I tell people: I go, "Here's my mission for the business." This first one is very selfish, which is, I want to work on cool shit with cool people and have a dope life. Yeah, that's just what I tell people. So it's very selfish. I just want to work with cool people on interesting things, and that's more so the mission than anything. And then it's like, if we are able to do this, this, and this, that will also be cool, right? Versus a far more grand thing. My mission statements aren't nearly as grand as yours.

Shaan Puri

I am in the exact same bucket. So, I definitely used to be about changing the status quo, you know, on my Steve Jobs shit. And, you know, I'll...

Sam Parr

that's who you looked up to you looked up to steve jobs looked up to

Shaan Puri

Elon Musk said, "Create an interplanetary species." It's like, "Oh, okay, cool. What's my version of that?" You know, I'm not trying to get to Mars and make humankind interplanetary, but I was trying to do that.

Sam Parr

Do you remember that story of Steve Jobs? He's trying to recruit the guy from Pepsi, and Steve Jobs is like, "You're just gonna sell sugar water for the rest of your life, right? Fuck you, Steve." What a dick.

Shaan Puri

now we're like logan paul genius puts sugar in water sells it to children

Sam Parr

dude the audacity so

Shaan Puri

I'm like you now. Here are the notes I wrote on my answer for this, on my little cheat sheet. I wrote, "I don't kid myself anymore. I'm honest. I'm building a lifestyle business for me and my team." Almost exactly what you just said, which is, "I want to do dope shit with cool people." Right? So, do cool shit with cool people in a way that leads to an awesome lifestyle. Meaning, I'm not trying to kill myself currently running the business. I'm trying to have a financial outcome for me and my team that lets us all elevate our lifestyles. That is the essence of this business; it's a vehicle to have an enjoyable lifestyle. Which is really funny because in Silicon Valley, a lifestyle business is the equivalent of saying "no offense" to start a sentence. It's like lifestyle business is how VCs pat you on the head and say, "That's cute." Oh, $1,000,000 in revenue? That's cute. You know, we don't invest in lifestyle businesses, right? If this is just a lifestyle business for you, we're not interested. You're low ambition, which in Silicon Valley, where I live, is low status. However, for me, I feel like I broke out of the matrix and I was like, "Wait, what the fuck are all these people talking about?"

Shaan Puri

Of life is to have a great lifestyle. What I don't want... I don't want to do something else with my life. I'm not trying to have a bad life; I'm trying to have a good life for me, for my family, and for my team. We all want the good life. Okay, let's do a project that's fun and interesting, with fun and interesting people, in a way that we all get rich. Is that so much to ask? It sounds like that is now the blanket mission statement on all of my projects. I don't know if that's inspiring to the troops, but it's inspiring to me. I hope that it just attracts people who are down with that and not looking for the rah-rah, you know, save the...

Sam Parr

World, I think that is a bit inspiring, to be honest. To the right type of person, at least when I talk to people, it seems like, "Yeah, that sounds wonderful." Another thing that changed with me is when I start new companies, I pick business models where I can afford to pay hires a lot of money. I remember when I was starting a lot of my stuff, I thought, "Man, I don't have enough money to pay a high-quality person a lot of money." It's a trap. I wish I could afford to pay someone $300,000 or $200,000 a year so I could recruit a certain type of person and spend time with them. So that has changed as well.

Shaan Puri

Well, like, what's an example? So, like, the hustle. Traditionally, you know, media companies when they start, obviously they don't make a ton of revenue. You're putting out free content, and writers are typically not that well paid. However, would that count as more towards the bad end of the spectrum, or was it on the good end because you did hire people like Steph Smith and Trung?

Sam Parr

A bunch of people, eventually. Yeah, I hired great people. For example, a good media company could be run a few different ways, particularly for sellers or ad salespeople. You could pay them $60,000 a year and say they have a quota of only $400,000. They would make $105 when they hit their on-target earnings. Alternatively, you could hire someone who you're going to pay a $200,000 base salary plus a higher commission, with the expectation that they're going to sell $2 to $3 million worth of stuff. Typically, those people who are more competent and capable, I find, are more enjoyable to be around. So, things like that are where I'm building a business that hires fewer people whom I pay more because that setup, I think, is more enjoyable.

Shaan Puri

So, I had the same problem because my first business was in the restaurant industry. The restaurant industry is basically like, you know, what is the worst type of business you could select? I think it's probably... I don't know if it's the worst, but it's down there. It's hanging out with the worst, whatever it is, right? Almost all of them fail. Even when they succeed, they have like 10% net margins typically. You need to open up multiple locations to ever make it big or have enough cash flow from a business like that to hire high-quality, highly seasoned people. I remember meeting the guy who ran Chipotle. I think he was the CEO or COO of Chipotle at the time. We were trying to create the Chipotle of sushi, and I was like, "Alright, you know, give me your advice." I didn't even know what question to ask, but I was like, "Give me your advice." He said, "Well, think of it this way: your entire product is in the hands of somebody who makes $9 an hour and doesn't want to be there. Everything you're telling me right now about how great the user experience is going to be, that's true for restaurant one. It might be true for restaurant 23, but by restaurant four, it's no longer true because you're not there anymore to do all those amazing things and give that amazing user experience. He goes, 'The trick in this business is whoever can figure out how to get minimum wage employees to give somebody a good experience, you get to win. That's the winning condition.' He goes, 'For like Chipotle, we ended up doing a bunch of things to try to improve that. I don't know if we did it fully, but like they did a couple of things. For example, if you're a manager at Chipotle and anyone you manage becomes a manager of a restaurant, you get $10,000 whether you work at that company or not, just like ever, because you had a hand in...'

Sam Parr

oh that's sick

Shaan Puri

In leading that person to be a... I don't know if they still do this, but at the time they did. They also changed the title, so like the manager was called something like "Restaurateur" or something like that. They paid them above market, and they're like, "You know, we're doing all these things to try to fix it." Starbucks did the same thing, giving people benefits so that they stick around and actually stay with the job versus having really high churn. But nobody's really figured that out. I remember it just wasn't a lot of fun to be in that business because I couldn't relate. You know, all the things I love—I'm an entrepreneur. I'm thinking about ideas or raising capital. I have big goals and big dreams, and I'm coming into work every day with somebody whose goal and dream is to get off work early. That would be the best thing that could happen to them at work that day. I was like, "Shit, that's not that inspiring." I don't mean that to knock anybody; it's just the truth. You're going to hang around certain people when you run a business. Ideally, you would be around people who are very, very like-minded to you in the sense that they share similar values, goals, and aspirations. Then it becomes contagious, and they're sharing learnings with you. I remember we interviewed people for this position because we kept having people flake out. They would just leave or they would steal or stuff like that. My buddy who was interviewing said, "Well, I like this person; they had all their teeth." I was like, "What?"

Sam Parr

and he's like I don't know

Shaan Puri

I was like, "I'm just looking for cymbals." He's like, "The last three people stole from us, and that sucked." I just want somebody who's not going to steal from us. That's my new bar. After that, I can figure out higher-level requirements and so on.

Sam Parr

Did you see on the TV show *Bear* where they hire this guy? On the first day, they catch him outside smoking crack, and they're like, "I think I need to fire you." But I should go ask... yeah.

Shaan Puri

And he's like, "Yes, chef! Fire him!" Yeah, and by the way, there's one lesson in there. My dad told me something. He goes, "Look, you're building a small business."

Sam Parr

and he goes but look but think about it you're still spending like every waking moment thinking about how

Shaan Puri

To make this thing successful, he goes, "If you worked on a big business, you don't have to spend double the hours. You're still going to spend every waking moment trying to think of how to make it successful." A big business and a small business both take the same amount of time. Why would you choose a small business? To me, that was the right advice for who I was. That's not the right advice for everybody, but like, someone out there needs to hear that right now. This idea that a small thing is somehow easier or less painful is just not true.

Sam Parr

It is not true, and it feels nice to be able to pay people a lot of money or hire a certain type of person that makes your day-to-day far more enjoyable. Talking about the naming thing, my opinion has changed on that to align with yours.

Shaan Puri

So, one thing we have here is branding or naming at the beginning. I've evolved my philosophy. I used to try to get the whole thing right right away. I was very precious about my idea, and I wanted my baby to be cute and ready for its first day in school. Then I realized that nobody cares about my baby. I have no customers, and nobody's paying attention. This thing could be called "dog crap," you know? It doesn't matter until it matters. Now, here's the balance that I've figured out for me. In most cases, I try to get the name right off the bat because changing the name is kind of annoying. You lose the brand recognition. I also try to get the trademark because I made that mistake before of not owning my trademark and having to change my name a year or two in. I realized, "Oh, I'll never be able to sell this without owning the trademark." So, that was a big mistake. But I don't know...

Sam Parr

that's true dude

Shaan Puri

what do you mean

Sam Parr

I don't own I I sold the hustle without owning that trademark

Shaan Puri

You didn't own a trademark for "The Hustle" as a media company. You didn't own anything because I know they have it now. We looked it up.

Sam Parr

they have it now

Shaan Puri

But what happens is if they look and they see that they can't get it because it's taken, now you have a problem. Now you're either going to get negotiated down.

Sam Parr

is that true I see I didn't even know that

Shaan Puri

like when moyes was selling native deodorant he didn't own the trademark

Sam Parr

and it was an issue

Shaan Puri

He's got the deal done and they're like, "Wait, you don't have the trademark?" He's like, "Yeah, but there's no other native deodorant." They're like, "Okay, junior, what are you talking about? That's not how this works." So then he's like, "Okay, who the...?" He's like, "I'll just go file for it." They're like, "Nope, it's taken by some woman or some guy sitting in Palo Alto doing nothing, squatting on it." He goes to that person and he's like, "Hey, I'd like the trademark." He tells the story on his episode of the pod. I think it's like one of the first 10 episodes of this podcast. But the short version is he goes and he offers the person some, like, you know, he's like, "Hey, can I have it?" And they're like, "No." He's like, "Okay, I'll buy it, like, you know, for $2." And they're like, "No." Then they figured out that he's selling his company, and then the price went way up. I think he ended up having to buy it for like either a quarter of a million dollars or like $1 or $2 million. He had to buy the trademark at the last minute.

Sam Parr

that's so crazy

Sam Parr

it's fine

Shaan Puri

When you're selling the company for $100,000,000, it's a very painful process, you know? It's better off just having it.

Sam Parr

You taught me something. I thought that they were nonsense, but I also used to think, "Name... I mean, look, my company was called 'The Hustle.' That's a horrible name." One time, I had this conference called "Con Con," the content conference. Like, I'm... I... my first business that I started making money online was called "Itch Juice Baby." Like, I'm horrible with names. But now, I do actually think they're very important. Before, I was like, "Names are bullshit. It doesn't matter what you call it; someone's gonna come." Now, I'm on board with naming and branding being very valuable.

Shaan Puri

So, I don't think a bad name kills you, but a good name lifts you. I completely agree. I think great design is a huge value add and costs almost nothing to have great design versus okay to bad design. It's not actually more money that it takes; it's taste. You just have to have the right people to do it. You can pay for that taste, like you can pay a fancy agency because you know they have the taste. But you could also just have taste yourself or find somebody that's cheaper who has taste. My feeling on design is I don't start with fancy design. I start with, you know, whatever simple design, and then I set a milestone almost as a reward. If we get to X, then I'm going to fancy pants my design because it's more for me than it is really for anybody else at that moment.

Sam Parr

you know if you're an

Shaan Puri

If you're a consumer packaged good or something like that, then the packaging is obviously super important. If you're a SaaS tool, for whatever your design, it doesn't matter as much.

Sam Parr

Before I launched Hampton, I paid an agency. I found an awesome agency overseas, so it was like $15 or $20. We did a whole branding thing, and I'm like, "I can't believe I'm doing this." It was totally worth it. Did I send you that presentation? It was really good.

Shaan Puri

And I liked it. I was like, "Oh, this is cool!" That's different. You wouldn't have... you would have never done that before. I have.

Sam Parr

never would have done that it was totally worth it

Shaan Puri

We both were very cheap with things before. I wasn't cheap with spending money, but I was cheap with my time, meaning I placed no value on my time. I think you were cheap with spending money, even though you had a bunch of cash in the bank.

Sam Parr

not anymore

Shaan Puri

Then, when I saw you spend $20,000 on your branding before, I was like, "Oh, that makes sense. He's got a killer name for his community, Hampton." Then he's got a really classy design that makes it feel elevated, which is my word of the year. I thought, "Oh yeah, what are the areas where I've been cheap?" One of mine, for example, was in recruiting. I used to take pride in just recruiting myself by hand-hunting. I would just be like, "Yeah, I'm going to go find people. I'm going to message them, I'm going to cold email them, and I'm going to convince them. I'm going to interview them." And now, I hire recruiters, and I'm like, "Oh..."

Sam Parr

for which roles for every role

Shaan Puri

Anything. If I need to hire, the first thing I do is text my recruiter, this guy Carson. I'm like, "Yo, Carson, I need X." He's a great e-commerce recruiter. So I'm like, "Carson, I need X," and he's like, "On it!" He's super aggressive, so he instantly starts sending me LinkedIn profiles. I'm like, "Yes, no, yes, no." He does.

Sam Parr

is he a full time employee or do you just pay him

Sam Parr

or he's

Shaan Puri

He’s got his own agency. He’s his own recruit; he’s his own solo shop. So, I use him to hire for these roles, and it just saves a ton of time. Sometimes, I’ll be like, “Yo, join this call so that you see what I ask.” That way, when you’re screening candidates, you can just ask these questions before me, right? I’m getting a way better result using recruiters. Yeah, you pay the commission when you hire the person, but hiring a great person faster is totally worth it.

Sam Parr

so how do you without blowing up this guy carson spot how do you pay him do you pay him a percentage

Shaan Puri

of the same as all recruiters you pay a percentage of their 1st year salary and if they don't and then you

Sam Parr

pay him like 6 months later

Shaan Puri

I pay him up. I think what I do with him is I pay him like 30 days after they join. But if they don't work out—like we had one person who didn't work out three months in—then if they don't make it three months, he just reimburses or credits it back or whatever.

Sam Parr

and then do you do you do it for all like even an entry level position

Shaan Puri

Everything... anything I need, anything I need now. I'm like, whatever I would spend the time doing, this guy is going to spend all of his time doing. So it just moves faster and he's better. I'm like, why the heck wasn't I using a recruiter? I used to take pride in doing it myself, and I was like, what am I trying to save here? Let's say you hire somebody for $100. The recruiter fee might be 15 or 20%. So you're going to pay $15,000 to $20,000. That's a lot of money, yes. But if your business is working, then it makes total sense to be using recruiters to increase your pipeline, save time, and get good candidates in seats faster versus trying to do it yourself. That's time you're not focused on the business, and that takes longer.

Sam Parr

The biggest thing that's changed for me with hiring is reference checks. For example, I messaged someone two days ago and said, "Hey, I'm thinking about hiring this one person. Do you think that they'd be decent at managing a small team?" The reply was, "I don't think they could manage anyone, let alone themselves." My response to that was, "Alright, thanks," and I didn't hire that person. It's that simple.

Shaan Puri

So easy! That should be... Thank you so much! What's your address? I'm sending you something because most reference checks will not give you honesty. When somebody goes out on a limb, it's actually like, "Yo, let me save you some pain here and give you my honest truth." Even though it doesn't feel good to take an opportunity away from somebody, it's like, "You know, sweet baby Jesus, thank you so much! I owe you one."

Sam Parr

So, like, yeah, I was over the top nice to this guy, but reference checks are so important. I do two things differently. First, I always ask for three references and then I call those three. I go, "Who else did this person work with?" Exactly. I don't care about the three they provided; I'm just trying to figure out who I can refer to, who I can speak to that they didn't provide. But also, I won't blow up the applicant's spot if it's someone who needs to be a little secretive and not tell their current employer. So, I do that like crazy. Here's what I ask consistently: I want to hear bad things about the person, and I want to figure out if the bad stuff is something I'm okay with. I say, "On a scale of 1 to 10, how would you rate them?" They always say an 8 or a 9. I then ask, "Alright, how can they be a perfect 10? What's missing?" That's typically when they'll tell me the bad stuff. I'm always looking for that. For example, they might say, "Well, they've made mistakes doing X, Y, and Z." I think, "Okay, I could put up with those types of mistakes." But if they say, "They miss deadlines all the time," I'm like, "Well, I'm not going to put up with missed deadlines. I'm not willing to accept that." So, I do a ton of reference checks now.

Shaan Puri

So, someone taught me a good way to do reference checks. I don't remember the exact question, but there are two things that I do during the reference check. One is trying to figure out if this person is one of the best people they worked with at that company. I ask the following types of questions: You know, in my experience at every company, you can look around the room and see two or three people who just have the team on their back. You look at them and think, "Man, if we didn't have this person, we would be in a rough spot." These good things that are happening probably wouldn't have happened if not for their force of will. So, I would ask, "Who are the people like that at your company?" Or I might say, "Would you count this person as one of those people?" I'm just trying to gauge how much conviction they have. For example, do they respond with, "Oh yeah, for sure," or is it more like, "Yeah, you know, they're good"? I'm looking for which one of those it is. The second thing I'll ask is, "You know, I'm thinking about hiring this person. I'm leaning towards hiring them because I'm trying to disarm them. I don't want them to feel like what they say is going to mess it up." So, I might say, "But, you know, I don't feel comfortable with this. I don't know what they're not good at. Everybody has things they're not good at. I'm not sure what those are for this person. I know they must have things that are going to disappoint me or things that they're not strong at; I just don't know them yet. What are they?" This way, I can feel like I have the full picture before I go ahead and pull the trigger on hiring them. That's how I get them to tell me those things.

Sam Parr

why'd you write paid tests what's that

Shaan Puri

So, my thing with hiring is that I would say two things have improved my hiring process. **Number one:** Paid tests instead of interviews. I will spend the time—I'll spend 3 to 4 hours creating a paid test. I create a document that outlines a brief, and I'll say, "I'm going to pay you." Depending on the role, it might be $200 or it might be $2,000. I'll pay you to spend a day on this because I want to see what you do. I just wrote, "Words equal lies." It's like, I don't really... I'd rather just see your work than hear you tell me that you're good at it. So, paid tests is something I now lean towards. In the end, that has saved me a ton of time. **The second thing** I did: I have a buddy who I let invest in one of my companies. I didn't really need him as an investor, but I kind of realized that, as a CEO, your job is just decision-making and good judgment over and over and over.

Sam Parr

are you the ceo of your ecom business

Shaan Puri

No, I'm more like a chairman, so I'm not active day to day now. But I will... I don't know. So what I'll do is, I'm like, "Oh, the CEO's job is just decision making." Or any leader's job is decision making. How do I get my decision making to be better? The difference of making 10 to 20% better decisions every single month adds up. That creates a very different outcome. So, I brought this guy in, and when I told him, I go, "You know, I really want your help hiring." He's like, "Yeah, sure! I'll see if there's anyone in my network." I go, "No, no, no. I want you to do three interviews for this one role for me. I'm hiring a CMO, a Chief Marketing Officer, and I think this is the make-or-break hire for this business. I want you on the call, and I want you to lead the interview, and I want to listen." So we did two things. First, I would interview them separately.

Sam Parr

you you the an investor you you let an investor do that

Shaan Puri

He's one of my best friends, and yes, he invested in my company. Got it. He's a founder himself and has a lot of experience. I've seen him make great hires. So what happened was I would interview candidates, then he would interview them. I would like them, and he'd be like, "No, trash." I'm like, "Interesting. What makes you say that? What did I like? What did you not like?" The thing for him was always that I pressed him for specifics, and he didn't have any. He realized that he presses for specifics way more than I was previously doing. I would try to figure out, "Do you have experience doing this? How would you rate yourself in this? Tell me a story." They would tell me one story. What he would say is, "Cool, what was the revenue when you started? What was it, you know, and how did it grow in the first 18 months?" If they didn't even know that number, then they were out. You know, if you're a CMO and you don't know how much the revenue changed from day one to month twelve or whatever, you're out. Then he'd say, "If they say the number, cool, what were the three things that you did that most impacted that?" He'd say, "If you can't tell me three wins you've had in the three years you've worked there that most impacted the revenue, then..." He would also say, "Oh, you did that thing? Okay, cool. Can you screen share real quick and just show me? Like, you're saying you did this. Can you just show me how you think about this? I want to hear you talk out loud." I was like, "Oh, okay, there's a different level of specificity here that I need to be doing in my interviews." So a very useful thing was seeing how a master does it so that I could up my game.

Sam Parr

that's kind of an interesting thing because I've changed I did the 180

Shaan Puri

what was your before what's your after

Sam Parr

I would create my goals. Before, I would set the most ambitious goals because it was like mental masturbation. I was just using this spreadsheet and saying, "Yeah, we're going to 3x this year," and then...

Shaan Puri

like 5x

Sam Parr

Yeah, 5. Look at that! I'd be like, "Can you change that 3 to a 5 and change this 0 to a 9?" And like, it's like boom, we're there. Alright, get after it, guys! I didn't understand that they're the ones doing the work, and so it's kind of bullshit that I'm creating these crazy goals that have no math behind them. I also thought that really ambitious goals were inspiring. I actually think achievable goals are inspiring. I try to hit about 75% of the goals that we set. If I'm not hitting about 80%, my goal setting was quite bad. So, hitting goals that are not that ambitious, I think, gets you a better outcome than missing incredibly ambitious goals. It creates more momentum.

Shaan Puri

I agree with you momentum is momentum is key

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Shaan Puri

My goal thing now... So every time I start a project, whether it's a company or an initiative within a company, I have this thing called the **kickoff doc**. It's a one-page document that I fill out religiously. It basically starts with, "What are we trying to do here?" We're trying to do this in plain English. Then, I define what winning looks like. This is where I set two goals: a **floor goal** and what I call the **FBI goal**. The floor goal is basically like, you know, if it was below this, I'd be surprised and a little disappointed. The FBI goal is what would have us running around here, chest bumping, saying, "Oh my God, I can't believe it happened!" Now I have this range: my minimum and my dream. Of course, we're going to shoot for the dream, but we also need to understand that a win is a win. Anything above this floor is a win. We have the two targets, and we ask ourselves, "What would it take to get to the floor? What would it take to get to the FBI goal, to get to the ceiling?" So that's the first thing I do. The second thing I do is set an **anti-goal**. I learned this from Andrew Wilkinson, which was...

Sam Parr

yeah that was smart you could achieve you know you could double revenue

Shaan Puri

but if I wake up every day and I'm stressed out or if I doubled revenue but profits went to 0 because I spent so much on marketing then I kind of lost while winning so anti goals like you know I'm not trying to work so hard I don't see my kids right like in life I think anti goals are really important to counterbalance what and what are the the specific thing here is what are the understandable traps we could fall into while trying to achieve those goals so for example with this podcast you're like oh I wanna double rev double downloads great what's a trap you could fall into every day I'm on the algorithm trying to figure out what click baity shit I could do where I'm knocking on neighbors' doors asking them how they made their money and then I pants them and then I put a pie in their face like yeah that would do it but I would sell my soul and lose some dignity and not have that much fun doing it so that's like losing while winning so I think anti goals are really important I started doing those the next thing on goal setting is I realized that much more important than the goal like it's like I would do these like big bursts where it's like we do this planning and set this goal then like 3 months later it's like hey what's the goal and then like it's not even on the tip of anyone's tongue and I'm like oh shit this is backwards like first of all I shouldn't be the one setting the goals because like you know in game of thrones the opening scene where ned stark has to like execute the guy and his son is like oh do you have to do this like can't someone else do this and he says no like he who speaks the sentence must swing the sword and it's like I can't expect you to go do all the work for some goal I set sitting in my boxers in excel right like now it's like if I'm gonna set a marketing goal I'm gonna set it with and really like the cmo has to own that goal they have to know that that's what they want that that's what they think is achievable I'm gonna push back or hold the standard but they're gonna ultimately speak the sentence cause they're gonna be the ones who swings the sword so I make them do it and then the second thing I do is I enforce that it's how do we keep this top of mind and at the tip of our tongue and that's like creating rituals where we're seeing things daily and weekly that tracks to it because it's far more important to regularly look at the kpis and ask ask the right questions versus trying to set a great goal once and then never thinking about it or not really looking at it on a religious basis

Sam Parr

Do you lose your temper and yell? Have you ever made someone cry, like an employee? Have you ever made an employee cry because you yelled at them?

Shaan Puri

I apologize for the confusion. Here is the cleaned transcription: Not because of you. No, I never yell, but I've never made them cry because of you. I've done that. I don't think I've ever yelled. No, I could be... I could be like kind of else. I can... I'll curse, like I'll be like, "Hold on, wait, what the fuck are we doing here?" Right? But it's more of that... that are just... you've.

Sam Parr

never been like you're an idiot you've never insulted someone or beat them up

Shaan Puri

I'm sure that I've been rude

Sam Parr

you know just punch them in the face or just straighten their ass rude but

Shaan Puri

I, but it's, you know, there's some finesse to my rudeness where it's like a backhanded slap, not a front-handed slap type of thing.

Sam Parr

There have been many times in the past where I've lost my anger, and I’ve been really just a huge bitch to someone. I deeply regret that. Not only do I regret it because it was just silly, but the way I used to react to bad news was by yelling at people sometimes. I would lose my temper and freak out. I realized that this is just so weak. For so many, that is just a bad way to handle things. I've come to the conclusion that I can't change people. If I think someone is just repeatedly screwing up, I shouldn't have hired them. I made that mistake. Someone is either a great executor who sometimes makes mistakes, or they're just never going to change and they're just not good. I think losers exist, and I don't want to surround myself with them. That's kind of my attitude.

Shaan Puri

Like your sign, it's like a store that says, "No shoes, no shirt, no service." It's like losers exist; we must avoid them. Keep them out.

Sam Parr

yeah like I think that that's real like losers exist and sometimes I've been a loser

Shaan Puri

I tweeted this out when I was working at Twitch, or like right after I left Twitch. I think I tweeted this out. I go, "Well, you know, seems to be a pattern." Basically, there's a pattern now, which is that when someone's great, odds are they're great kind of right away. Of course, there are exceptions, but I would say the general rule is that the best people I've ever hired, it's pretty obvious within 3 to 4 weeks that they're amazing and that they just stay amazing. Of the people that were late bloomers, the key there was just the only consistent pattern I found was I hired somebody before I even understood what role they should have or what the role is. When they had an undefined role, they didn't really do very well. But then when I defined a role for them and I said, "Look, this is what you gotta do," they performed. What I found is that when I have a defined role for someone and they're not very good, it never really changes for me.

Sam Parr

You can't change people. I used to lose my temper, and I would curse. I definitely made people feel stupid, and that was such a bad mistake. Because, A, that's just wrong; that's not how you should treat people. But B, I'm not going to get my desired outcome. They're not going to change.

Shaan Puri

Exactly. I still suck at that, to be honest. I'm not like a yeller, but I can make people feel small. I kind of realized this the other day. In every interaction, you're either going to walk away and leave someone feeling a little bit small or bigger, based on how that interaction went and how you treated them. I was like, "Damn, I think I make people feel small a lot." You know, I think I'm doing it in service of like, "We're doing dumb shit; we need to do the right thing." But I'm definitely not like... I've seen people who are really good at still getting the thing done without ever making people feel small, and I want to learn that.

Sam Parr

jedi thing an example who's an example of someone who does that

Shaan Puri

Our buddy Sully, I think, is pretty good at that. I don't know what he's like inside of a company, but I've seen him as an advisor type of guy. I know what he's thinking in the moment. I'm like, "Oh man, he's gotta be looking at this being like, 'What in the actual fuck is going on here?'" But that's not what comes out of his mouth. He will finesse his way there. I don't think it's because he's a kinder, nicer person. I think it's because of the last thing you said, which was, "I think he's realized that's not how you get to your desired outcome."

Sam Parr

that's not how you get desired outcome not at all

Shaan Puri

Exactly. So, I think that that's definitely an area to temper. In fact, the one time I did make somebody cry was when I was firing someone. I realized in that moment, he wasn't crying because he was sad about getting fired. Obviously, there's that part of it, but he was very surprised. That's on me. I was too scared to be clear upfront that, "Hey, this isn't going the way we need it to go. It's gotta go differently, and here's what the level is." Currently, it's not at the level we need. I avoided that tough conversation, and now I'm having a tougher conversation because I avoided that one.

Sam Parr

how many people have you fired

Shaan Puri

I don't know like 20 really yeah

Sam Parr

that's that's a lot right

Shaan Puri

I don't know. I've been going for 16 years, like, you know, one a year. It's not been that long, not that much.

Sam Parr

I've not fired that many people. I'm such a punk. There's a story about Dave Portnoy. Dave Portnoy is like, "I don't fire people. It's impossible to get fired by me. I'll just pay you, and you can be lazy and a bum, and I'll just make fun of you. It's good content." I kind of feel the same way. I suck at firing. I have a good script. I basically say, right off the bat, "Alright, this conversation's gonna stink, but I'm firing you today." We could talk about why if you want. Now, I don't even say why. I'm just like, "This isn't working out," because it doesn't benefit me to say why. It only hurts you because I can sue you. But I'm horrible at firing people. I'm such a punk. I hate having that conversation, so I avoid it.

Shaan Puri

yeah but it's just like anything else like you just stretch the pain out longer versus repair

Sam Parr

oh I know

Shaan Puri

The key is... and I say this because everybody—every manager, everyone who becomes a manager of any people—should not worry. You suck! Everybody sucks as a manager at the beginning. Nobody is naturally just an amazing manager right off the bat. It is a learned skill. The key to firing... if you learn nothing else about firing, it’s that in the first 10 seconds, you need to say the news. Just do not beat around the bush. You know, the reason we're here today is because we're going to let you go. That has to come out of your mouth in the first 10 seconds. If you say anything else...

Sam Parr

right away

Shaan Puri

In the first 10 seconds, just realize you're being a complete asshole. Because when it does come, and they realize, "Wait, what were you just saying? All that stuff about why didn't...?" You're going to blindside them in a much worse way. It's key, absolutely key. I have a couple of other areas I want to ask you about. One is, I think, probably the key to making things work: keeping things simple and focused, and knowing what to say yes to and what to say no to. Do you have anything that you actually do to make that better now?

Sam Parr

I think that I'm so good at focus, and I'm bad at it. I've missed a lot of interesting opportunities. By default, I say no to everything, and it's actually cost me a bunch. For example, at The Hustle, we thought about launching multiple newsletters, and I was like, "Nope, we're just gonna do this one thing. We're gonna do it well," because Scott Belsky told me to focus and to only do this one thing. So I'm literally gonna say no to everything. Our competitor did, and they scaled their revenue significantly faster. So I said no to too much, actually, but my default was just, "I'm gonna say no to everything."

Shaan Puri

That's interesting. I'm the opposite. I'm a "shiny object syndrome" kind of guy, and so by...

Sam Parr

The way the hustle went, we didn't even have an Instagram handle until like four years in. I was like, "No, we're not gonna do social media. We're doing nothing." It was like, "We're doing nothing. We're just gonna do this one stupid newsletter all the time."

Shaan Puri

can we have lunch no

Sam Parr

Dude, one of my biggest regrets... By the way, I used to be really cheap. Deep in my soul, the thing that hurts me most is one time I bought all these supplies from Costco for a conference. I ended up returning $2,000 worth of canned soda and stuff. The lady at the front desk was like, "You're pathetic." I was like, "What?" And she said, "You know we throw all this stuff away. Is this just from some party that you threw?" My answer was even worse, which was, "No, it's for a business conference. I made a lot of money." It hurts my soul that I was so cheap that I returned open cans of soda to Costco for $2,000. It crushes me. The 24-pack was partially used. I can't believe that was such a punk move. I can't believe I did that. That's one of my biggest regrets. That's next to this one time I tipped a taxi driver, and he said, "Oh no, you don't need to do this." I said, "Oh no, you need it," instead of "You earned it." Those two things crush my soul. I can't believe I said that. But what were you saying? You were talking about focus. What were you talking about? Focus... fucking focus.

Shaan Puri

As we get back on track, I create... I now have a document for every business, every year, called the "Big Bet Stock." This is basically like, we are going to make some bets this year. We're going to do some things, but let's be super conscious about what we're saying yes to and what we're saying no to. So, my Big Bet Stock, and I'll literally write it like this: I'll say something like, "We bet number 1: We really suck at inventory management today. Forecasting is just me looking at the spreadsheet and making up numbers based on what I hope happens. I know there's probably a smarter way to do this. Other people certainly have solved this problem. I need to figure out how to hire people who know how to do this." So, the bet is, I'm going to hire 2 people, and that's going to lower our waste from X to Y. I write a sentence like that, and then that's my bet. I'm going to make this hire for this outcome because of this problem. And I write, "Bet number 2: You know... "

Sam Parr

keep talking about businesses though are you what how many are you what how many well

Shaan Puri

like I I would do this even for the podcast right like big bets right hiring already okay why why why did you do this why did you make this bet or we just launched the clips channel okay why am I going through this effort where I'm sitting here clipping my favorite parts of podcasts because I hope that somebody out there wants to listen to the best parts on youtube when they come up because that's how I like to listen to things and so I'll write it out and I'm like if I'm gonna invest my effort my time my money into something then I write it out or like you know maybe it's for shepherd for shepherd hey here's the bets that we're gonna make and so I'll do this exercise because it's so useful so I write the big bets and it's like here's the 3 to 4 big bets that we're gonna make the things that we're gonna bet on that we're gonna do that we're gonna invest in and we're gonna try to do really really well and then I'll make the no list right before that and the no list I write there are a bunch of other things that we could talk ourselves into doing that are easily justifiable however we're gonna say no to these things this year because we wanna do the we actually want the things above to happen and then I'll make the no list here's the things we're not gonna do this year that we totally could have talked ourselves into so for me that was a very useful exercise and then when I bring people on everybody I sit down with them with this big bets list I'm like here's what we're doing and then if they're the one responsible for it I'm I treat it like a commercial because I'm like I need to make this memorable I need this person to wake up and remember because it's not just for me to be focused I need my whole team to be focused how do I do that I basically shrink down one of these bets into a almost like a like a slogan or a jingle for their role it's like your your mission is this remember that and I'm gonna say that to you probably a 100 times in the next 3 months and we're just gonna keep checking in on that and that's how I'm gonna bonus you is if you did that or not and that's how I'm gonna assess your performance is if you did that or not and if I ever if if I ever what's a priority it's that that's the priority and I took this because like peter thiel said that he did this at paypal he's like yeah I don't know whatever management's not my favorite thing so here's my shortcut to management everybody at any time has one priority and if you ever try to talk to me about not that priority I will just simply leave the room

Sam Parr

I thought that was just a visual. That was so funny to me. What a fucking weirdo! I was like, "Peter, can you be normal for once?" Like, yeah, if someone walked up, stood up, and walked away when I was telling them about stuff, I'm like, "Dude, can you just be normal?"

Shaan Puri

**I have an idea about a new program that we could do, and he just drifts away like a hot air balloon.**

Sam Parr

what a weirdo man

Shaan Puri

I love it

Sam Parr

Stories of... I dig it. There are stories of Elon doing that too, where in an interview, like within 30 seconds, he would be like, "Oh, I'm not interested in this person," and so he would just hang up.

Shaan Puri

yeah he he emailed out a tesla

Sam Parr

too the laptop closing he was like

Shaan Puri

If you're in a meeting and in the first few minutes you realize that this is not useful to you or to anybody, please stand up and leave. Your time is valuable. These meetings are a drain, so vote with your feet. Just get up and go. That is completely acceptable behavior here at Tesla.

Sam Parr

Do you ever send emails with one of those emails where the subject is the body of the email?

Shaan Puri

yeah of course it's just like a pager basically you're treating it like a pager

Sam Parr

I had one of those jobs. The only job I ever had, my boss sent me an email like that, and I was like, "Is this how we send emails?" Then I sent them an email asking, "What's the status on this thing?" It was in the subject line. The reply was, "Don't ever send me an email like this again." It was very embarrassing.

Shaan Puri

I actually think there are those levels. Basically, what I realized is that rich people and busy people treat email like texting. Their email is like lowercase on their phone, one line, totally fine. That's like their normal way of emailing. Then, mega-rich people treat email like it's letters. They'll have somebody actually screen them, print them out, and then they'll kind of review them at their desk on paper. This is like the old school way of doing things. Who do you...?

Sam Parr

know who does that I think mark lohrey does that if I had a guess

Shaan Puri

I feel like he did tell us that trump does that

Sam Parr

he's well no he told us he didn't even own a computer

Shaan Puri

He didn't own a computer. Yeah, but like I've met a couple of people. One of my old bosses used to do that. He would print out his important emails, and his assistant would have them printed and just put them on his desk so that he could see them. He would leave a sticky note on them, and she would go figure out what to do. I worked for a guy who had four women at the office with giant TV screens just managing his inbound emails. He would just stand and walk around. They would be like, "Oh, this person said this," and they would pull it up on the screen. He would just orally dictate his reply, and then he would walk away. They would just keep managing. This is insane.

Sam Parr

Man, most of the day, I feel like I'm responding to stupid messages on Slack, Twitter, text, and email. I cannot stand it. It is so hard. So, I actually think printing out that thing and replying could be kind of cool, actually.

Shaan Puri

Yeah, or creating... you need some kind of firewall. For me, it's like my assistant is the firewall. She triages all the emails, and then I only check my email for 30 minutes a day, you know, because it's already taken care of. If there's something that needs a faster reply, she'll tell me; she'll text me, and then that's it. There was one other thing that I was going to share, which is there's a big difference I think that's worth saying, which is pre-product market fit and post. So, pre-product market fit, what you do versus post is very different. I think most of this call has been about post, but actually, most of my life has been about before you have product market fit. Before you have product market fit, you don't do any of these things. You literally just figure out what your product is, and you go try to sell it and get customers. Then you basically get rejected, and you handle that. You iterate until you figure out what the product should be and who the customer should be. You've proven how to get product and customers to connect and get more customers. I think that's worth saying too. Then, after you have figured that out, after you have figured out that this product actually has a market and you know how to communicate it to customers, you know how to get customers, then you hire people to do more of that. I would say, like, I saw you firsthand with Hampton doing this, where there were a couple of months where you showed me your calendar, and it looked like a Jenga tower. It was 20-minute calls stacked on top of each other, sometimes overlapping. I was like, "What is this? Where do..." and you're like, "Yeah, I'm trying to go get the members for Hampton. I'm trying to figure out what Hampton is." You sent me like a kind of a script or a landing page you were writing yourself, trying to explain what the benefits are and who it's for. You considered, like, "Should I take this angle or this angle or this angle?" It would help you, you know, like reply on the Google Doc, whatever.

Sam Parr

It's kind of like being a comedian, you know what I'm saying? When Hasan Minhaj finally does his Netflix show, he's done 200 before that, and you see which angle hits.

Shaan Puri

right

Sam Parr

and

Sam Parr

It's the same thing. It's like I gotta see which angle is hitting. Someone tweeted out or something, "Product market fit is like sex. If you have to ask, you're not having it," or something like that. I was like, "That's so stupid." I've definitely asked in both of those situations if I have it or not. That's one of those lines that sounds good, but that ain't true. I was uncertain multiple times about both of those things. Is it happening? Is this it? Are we doing it? And on that note...

Shaan Puri

that's the pod