Ol 002 - Million dollar business outsourced with dan andrews

Inside this second episode of Outsourcing Live, I have a guest interview with an entrepreneur who's created a million dollar business outsourcing to virtual teams globally. He will also share with you how he was able to travel to beautiful exciting locations whenever he wants to because he has a virtual team helping him. And also in the quick tip section, I reveal to you the backup tool I used that saved all my data when my hard drive crashed. So let's get to it. VO: Welcome to the Outsourcing Live podcast where you will learn to build a virtual team to run your business. And now, your host, Tyrone Shum. Tyrone: Hi everyone, it's Tyrone Shum here. I've got a really special guest here today. He's all the way from Bali and I've been communicating with this person and also have been really, really big fan follower of his podcast at the Lifestyle Business Podcast for many, many years and it's just been awesome to be able to get him on the call today because he's running a very successful business. And the reason why I want to get him on the call today is because I wanted to find out more and share with everyone here as well all about the things that he's doing with outsourcing. So welcome to the call Dan Andrews. Dan: Thank you Tyrone, it's good to be here. Tyrone: Awesome. Dan, for the people who don't know you - I guess - if you haven't hopped over to his podcast on the Lifestyle Business Podcast over in iTunes you should check it out because that's something that I personally listen to and a lot of entrepreneurs listen to. But Dan's got a very unique type of business here. I'll probably say that you've done very, very well in the last few years that you've setup this business with your co-host or also your co-captain I should say, Ian over in United States - Dan: Yup. Tyrone: Tell us a little bit more about what you currently do and yeah I guess we're going to a little bit later about the outsourcing stuff that you're doing as well. Dan: Sure so we ran a product development business and we deliver hard goods primarily to ecommerce outlets. But what we'll do is we'll find - what we see an under served niche. What are the niches that we currently play in as cat furniture for example. So we found a niche - certain kinds of cat furniture that we thought we could create a better product. We designed a better product and we go and manufacture it in China. And then I create websites, ecommerce stores with my staff in the Philippines and abroad and we put up an ecommerce site and we start to market that with traditional internet marketing types of tactirs. We've been running this business for 4 years now. We have about 12 employees - most of them are overseas like digital nomadic types. We have an office in California as well. Our turnover this year, our ran rate is over a million dollars this year so things are going pretty well. Tyrone: Fantastic. How are you doing in pretty big business there especially when you got yourself and Ian over there in the States. This is the interesting thing is that you're running a very mobile type of business as you can see I mean we're about to argue right now. Dan: I'm in an internet cafe in Bali Indonesia. Tyrone: Very, very fun. So let's actually before we jump into a little bit about your business, maybe share a little bit more about this lifestyle type of business that you've been creating over the last few years and why, what's the reason behind that you've done it that way. Dan: Sure. I mean I think - you know - if - for me, I don't have a venture-backed startup idea that I think in three years I can make millions of dollars right? So maybe if I had that sort of idea, I would go get investors and I'd say you know what I'm going to bone up, I'm going to wear a tie, I'm going to go to an office, I'm going to work my tail off but I kind of see look - I'm going to be running my business for the next 20 years regardless so it'd better be fun. So essentially what we're trying to do is have our business serve us. And that's what we see a lifetyle business - you know that's sort of the principle of lifestyle business for us. So for example, last year I took a vacation to Bali and I met up with my business partner here and we're both like this is the greatest place on the freaking planet. I would love to live there next year. And so I thought all right I'm going to move there. How can our - we work out into our business? And so we did. We got a villa here, we brought our interns over here. We started blogging about Bali so I think that's to me the difference to me between to more traditional business which the goal is to - you know, regardless of circumstances, maximize profit for the shareholders. A lifestyle business is about serving sort of the personal interest of the owners. My personal interest was to live in Bali this year so I'm finding a way to work that into my business. To me that's what lifestyle business is all about. Tyrone: Which is absolutely amazing because - only like most people probably get used to the fact that in order to be able to have successful business you've got to obviously have an office, you've got to have staff, you've got to have a product that sells but we've kind of turned it upside down with your business there and I know that you've really, really been talking a lot about Tim Ferriss' 4-Hour Work Week especially in your podcast and you've emphasized it. Actually most recently you've emphasized it saying that people were knocking about the 4-Hour Work Week and saying that it doesn't do. So yeah I mean it's a completely different mindset, a completely different perspective on running a business - Dan: Yes. Tyrone: But in order to do something like that though, you obviously need to have very, very good systems in place because the fact is you can't have a business without having staff, you can't have a business without running systems in place. How have you been able to achieve that in your business at this point in time? Dan: Well, the best system that we have is highly trained, motivated employees. You know, there's no - there's no rip sheets, spreadsheets process map that can compare with an intelligent passionate employee who is day to day trying to solve problems for your business and serve your clients. So how do you get that done? Well you got to make enough money. How do you make enough money? Start with the phone. I think that's the biggest thing especially people that are building internet businesses forget and the big point The 4-Hour Work Week just gets crossed over, it's that Tim Ferriss advocates and so do I that the beginning of your business you primarily market it with a telephone and I think the kinds of information and relationships that you can create on telephone are absolutely unmatched. Once you get that core information about who your clients are and how they operate and what they want and you can sort of scale that with more scalable systems like a website or an ecommerce store or whatever, a membership or whatever it's going to be but I think you start with the phone. That way you can jumpstart your business, hire people and then that's your process. I mean I have a bunch of people that work for me and that's basically - my hack here. The second thing relative to that is you got to create a remarkable business, you got to create something that people are excited to be part of - you know, otherwise it's just another job for somebody. And I don't want the people that work for me to feel like it's just a job - you know that's - I'm not going to get - the best performance from them and I'm not going to have any fun either. So that's been part of the fun of this whole thing as because we've taken our business in a direction that we want to take it. Now we're excited about. I think that rubs off on our employees and they are stoked to be a part of this as well. Tyrone: That's fantastic. So you mentioned that you've got some employees in your business at this point. You've got up to 12 employees right now, are they located in Bali with you or are they're across the rest of the world, scattered across different places? Dan: Scattered. I'd say four or five in California. They're always switching because sometimes it's contract. In terms of full time we got 4 full time in California. I have two guys living with me here in Bali right now. I've got one guy who's traveling in the Philippines, one guy who's traveling in Portland. Ah - where is everybody else. Oh we have 2 full time Filipinos, 1 contract Filipino so it's yeah it's everywhere. Tyrone: There you go I mean it's amazing because what you're saying there is actually fitting perfectly into a business model that allows you that kind of flexibility. I mean we're talking about lifestyle business and I'll be talking little bit about outsourcing very soon with you but what's amazing is that you're able to have that flexibility of so many people working for you, not necessarily side by side with you but into linked somehow or another through means of technology e.g. the internet and also Skype and so forth. So it's obviously working really, really well for you. Dan: Yes. Tyrone: What I want to actually dive into now is - Dan: Yeah. Tyrone: I guess when you first started your business and as you said your core aspect is to making sure that you've got a telephone, you've got a product, you speak to your customers, but as the business has been expanding over the years that you've been doing, what was it that you've decided to go okay, we might look at outsourcing some of this work to other people and obvously you've been doing a little bit in the Philippines and all across the rest of the world right now. What was that turning point when you just said okay go start outsourcing? Dan: I think the biggest thing for us was with the websites so we knew that we needed worldclass website presence but we couldn't afford it. So I think a lot of people are in that position, they're like I want to create website. I see this people like Tyrone made a successful like this fantastic website. I like a website like Tyrone. If you walk - if you walk down at a guy at their corner store who's making websites he's going to say well I'll do one for you for 5grand. And it's like I can't afford 5grand so - that was - it was a necessity. We needed worldclass websites and we couldn't afford them so we're like how can we get this done. So we started looking to places like eLance, I think that's sort of the first domino that failed and then I was like well, I had a - I ended up with a business partner in Vietnam so I went to Vietnam for a while and got software developers there. And then I heard about the Philippines and it was just like light bulbs went off so I flew to the Philippines and so yeah I mean the first domino though was just a necessity. I mean we could not afford - I mean I'll give you one example that I think a stellar. A Drupal developer, the guy who I paid a contract work to build my first Drupal ecommerce store. His annual salary is $95,000 a year in the US. Tyrone: Whew! Dan: And he was just doing contract work with me. He's a friend of mine, he did a contract for me on the weekends. Tyrone: Yep. Dan: I hired - not an equivalent developer but a good developer in the Philippines for $1,000 a month. So you're talking difference of 95grand a year plus benefits, plus health insurance plus all that stuff. Plus liabilities all those kinds of stuff versus $12,000 a year in the Philippines. So - you know, no brainer. Tyrone: It was no brainer. In actual fact, the next question I was going to ask you was about the benefits that you've found from there. You've pretty much touched on that point already. Any other benefits that you've seen from that just by obviously outsourcing to the Philippines or Vietnam as you mentioned. Dan: Well you know - just with outsourcing it's interesting. Because it's sort of changing a little bit like as our communications with each other gets stronger. Things like Skype and - using web tools like Basecamp or whatever, it's almost like every employee you want to hire or every person you want to bring on your team you ask yourself a question what's the ideal place that they are located? You know what I mean like you start this new question like why hire a software developer in Australia where you can just hire one a couple of islands away which is 15% of the cost so - the benefit of cost has been incredible but I think there's also an element of expensiveness has been fantastic for me. I mean as a someone who loves adventure travel I mean I get the opportunity to live in the Philippines for a year and a half, learn a whole new culture, get a lot of new friends and there's a lot of interesting benefits that come from that stuff like in a month I'm throwing a sort of a digital nomad or internet entrepreneurs conference in the Philippines Tyrone: Nice. Dan: With the help of a lot of resort owners and friends that I met there. And I know if I would just sat in my office in California and never got on an airplane and never learn about these new countries, I think our business would be a much less interesting place to work. So - I think that there's at least side benefits. It's a lot of fun. The Philippines is a fantastic country it's a great place to just go get involved. Tyrone: Yeah, that's awesome. I mean obviously not everyone can do that kind of travel around and just run their business and so forth. You've got to have that kind of - before jumping into doing that but that is awesome to be able to just fly over there. Actually I wanted to ask you as well, what was your main reason for flying over to Philippines because a lot of people just don't won't have the - I guess the cash or the capital to just fly over to Philippines and just hire there. They usually just do it remotely like contact people like Chris Ducker from Virtual Staff Finder and so forth or contact people from the internet and just ask them for information just directly. What was your main reason for flying over to Philippines to hire people, look for people? I mean I remember in the previous podcast you mentioned you're setting up a full team with an office and so forth like that. What's the story behind all that? Dan: I didn't do that actually. Well, it's sort of a simple story. I mean I was - at that time I was essentially location independent in terms of my income streams. I mean I was - running this business. I was running the web portion of the business from an office in California. And I was within about - I mean at that time my Vietnamese developers were not doing a good job and I just heard about the Philippines and I'm sitting there in my office and I'm thinking what the heck am I doing here? I don't need to be here. I don't do everything productive here and so I just left. I mean I think - I think people - they in general, they - they set a bar too high for what their target monthly income needs to be in order to live the independent location lifestyle and I think people set the bar too high on security. I'm very much just the kind of just do it kind of guy and I think that you know, got me out the door sooner. If I would have waited until everything was locked down and like everything was safe and everything was crazy, who knows I might still be sitting in that office in California. Tyrone: I think there's always that tendency. You know, most people are trying to look to go like if this happened in say a year's time 12 months time to try to plan ahead for it, then I'll do that but in actual fact it's all about taking the action right now to implement what it is that you can do. And if you wanted to travel like you've done as well just go and do it rather than just sit there and try to plan out everything's that possible. Even before this actually - Dan: Let me - let me give you a super actionable hustled up tip if there's internet marketers who are listening to this and they think why I like to fly onto Philippines too? But my website's not generating enough cash to really justify that kind of thing. A lot of people in this position, I mean it takes years building these kinds of businesses. So what I did and what a lot of people do is you hustle it up. So right there is a market opportunity. There are a lot of people who wanted to go to the Philippines and hire people but they can't make it there. So you start calling around other entrepeneurs you say hey I'm going to the Philippines. I will hire people, I will do this I will do why but I need somebody to help me fund this and so there you go, you can get people to help fund your trip to Philippines if you're willing to do some contract work. And I tell you what Tyrone, I've had contracts. I've had consulting deals the whole time I've been doing this location independent business. I do consulting on the side. And now I have my virtual assistants my interns do my consulting contracts. I actually never drop them. Because of the power of outsourcing, why would you drop that income stream. I mean these people are paying you - say you have a contract of $50,000 a month. Tyrone: Yep, yep. Dan: I've got one contract of $50,000 a month so I just get a virtual assistant to do all the work and collect the cash, collect the cheques. So - Tyrone: That's exactly what I do as well, too. You know, it'd be silly just to drop a contract especially if you've got it leveraged from people to be able to do it, you definitely would keep it. I'm telling the same boat as you. Dan: Absolutely. And so I think they think it's like oh I got to generate all this income from my site, my ebook or whatever you're trying to do it's okay. Go out there and pitch this deal. Everybody wants to - you know a little bit of help in the Philippines. People are already sold in the idea of the Philippines. So if you can go there and help them out then you can maybe get a contract. Tyrone: Yeah absolutely and it's very easy to do. I mean if you say for example, you took out a contract say in the States or even in Australia just to do some web development work if you're that kind of person or you do consultancy work, it's actually not that hard. All you have to do is just liaise with a client and then just send off the work to your virtual assistant. And that's exactly what you know Dan: Yes. Tyrone: I think majority of us who have setup systems to be able to do that or pretty much just give them the work. It's not that hard to do. Dan: Well I mean if you look at, if you're in Australia I guess a lot of your audience are Australians I mean, Australians are just getting hip to like what's going on in the Philippines and there are big contracts to be scored. I mean you can walk into small and medium sized entreprises and say all right I see you've got 7 web devleopers sitting there and you've got 15 SEO copywriters, the SEO copywriters were all making $15 freaking dollars now or the web devleopers are making 70grand a year, I think we can do something here right? I've got a plan in three weeks what can we do? Same thing with voice outsourcing. I mean there's an incredible opportunity. Cost are even higher for Australian firms in the Philippines because the time zones are lined up. Tyrone: Exactly. Dan: So I mean there's tons of contracts there. And if you need that 1 year runway to get your runway started in the Philippines, there's opportunities there are left and right. Tyrone: Exactly and all you have to do is just contact a few people. You know, even if you just contact us, we might be able to just refer people to you to be able to get those contracts done. So actually you know, you just got to talk and get on the phone and speak to people and really just hustle as you say. So it's absolutely a treasure. Dan: Absolutely. Tyrone: That's excellent. Well I like to just - get into a little bit more nuts and bolts now with your business and find out how you've been able to setup the systems to be able to outsource because I know a lot of people understand the concept behind it. You know, you've explained to the people that the reasons why you've gone into the Philippines to outsource your business. Now let's talk a little bit more about the nuts and bolts and I guess how you've also set that up. Where was the starting point that you managed to setup a team and what did you do? Dan: Ah I guess my starting point was hiring in job boards. So Bestjobs.ph, I hired a developer from Drupal.org, the sites - and also I hired a copywriter from his personal blog. So those were the three first hires that I made in the Philippines. When I first started in the Philippines, I basically toured the Philippines to get a feel for the place. Places I started at Cebu, I went to Boracay, I went to Manila, I ended up settling in Dumaguete for three months. I ended up settling in Manila and started an office and stuff like that. But my starting point was Bestjobs.ph, put up a job ad and started to jam up some employees. Tyrone: Oh excellent. That's really interesting. Are those people still working for you right now or have they - are they still part of your business? Do you still need Drupal developers by the way I should say? I do need Drupal developers. You got to need to work on my own hair. Ah yeah so I try to think no none of the original people that I hired like close to a year and a half now still work me. I'd say I have 2 employees now that have been with me for about - 15 months, that's about 15 or 16 months. Tyrone: That's pretty good. Dan: So that would be my longest term employees. To - I mean to be honest Tyrone I've tried a couple of times to hire in the Philippines. Tyrone: Yeah I mean like it depends on what kind of work they do. Like a virtual assistant who's looking for stable income and wanting to do to stick with you for long term and you've got good incentives and good benefits they'd want to stay. I mean that's with anyone regardless wherever part of the world you go into, US, Australia, etc. I think it's just about the culture as you said there. But when you actually came to the Philippines and you first hired those 3 people and you decided okay these are the people that I need, did you have sort of an idea of how do you want to train them, did you have an idea of what kind of things that you need to do with them, did you have to set hours like what were some of the knitty gritty things that you had to do when you first started with them? Dan: Yeah I mean - I've had like, I made so many mistakes on this and you know part of the back story is that I've - I was hiring people in the Philippines before I came to the Philippines too so like I was trying - I was doing it for 6 months before I actually got on that plane. I hired VAs, developers and stuff. And you know, I guess I would say if - if - the biggest problem that I had and the biggest people that I see people are having is that you underestimate how much effort it is to hire a VA. Like a lot of people see VAs just like I've got a website and I don't know to run it and that's a pain and so if I can - Tyrone says, if I get someone from the Phiilippines for $250 boom! I'm going to do that, I'm going to hire somebody and then my problems were going to go away. And the problem is, it's sort of like the promise of technologies is the promise of employees. Like promise of technologies has always been to work less but that's not the case, you get technology and you work more. Same thing with employees. Tyrone: That's right. Dan: The promise of employees is that you hire employee and you work less, that's ***. You hire you work more. Because you still got to do your work and then you got to help them do your work too. So yeah I don't know - like I'd say if you're thinking about hiring a virtual assistant or employee in the Philippines, get yourself prepared to really sit with them and invest in them, spend time with them. The biggest thing that I've ever done with employees is just spend time with them like go to Manila, learn about who they are. Spend time on the telephone with them, share with them what my goals are for them and for my business and I think the more I've got that relationship you can build the more kind of epathy you can average out of it, the better it's going to be. Tyrone: Absolutely. I totally agree with you actually. It's interesting that what - I totally align with you on what you said about those things is that get to really know them because I always tell people it takes you at least a month or to three months if your person that you're working with particularly VA or web developer or so forth is suitable for that role that you've hired them for and it takes some time to train them to get to really know them. Even just to get to know their family it is also a good thing because then when you get to know that then you get to help them meet their needs of what their want. Because they're just you and me, we're humans except they have a really good skill set that you're hiring them for and - I totally agree with you on that. Dan: Ah, yeah so I think the appropriate frame of reference when you're thinking about getting a virtual assistant is you want to think of them like it was hiring an employee in your home country. So I mean - a lot of people are like ah virtual assistants are pain in the butt, like - you know I've been having all this trouble with mine and like this and that. And I think a lot of these people, that's the same sort of feedback you're going to have about employees in your own country. I mean employees are always a challenge. Building teams is difficult and there's no difference. And there's some increased difficulty to sort of overcoming the cultural differences which aren't big but they're there, and then also the time and the - and trying to build relationship over Skype or whatever. Anyway I just want to say it's not the most difficult thing in the planet but just to get yourself ready for a challenge. You want to build a relationship. It's not just a pawn that you can move into place and get your websites done. Tyrone: Yeah, absolutely. I totally agree on you on that one. And the interesting thing is that you said that it's a challenge to build - I guess the team and the culture and so forth. Like say for example, do you expect once you hire someone say on a full time basis or to come onto your team as being a part time, do you even have ground rules say look this is your role and this is what you do or you use sort of also micro managing on a day to day basis because you know, to get them to where they need to be? Dan: Ah - no. So I don't - I mean I generally hire experienced people so that's number one thing. So I pay a little bit like higher price ranges which - I mean it just depends on your personality like I am a really hands off manager in general - Tyrone: Good. Dan: And so I don't want to manage people. And so I write like this morning it was Monday so I got on and I wrote my Filipino developers today, how you guys doing? Here are the kinds of things that I'm focused on doing for the business this week. Really general stuff like I'm meeting up with my business partner Ian on Wednesday and we want to meet up in the Philippines like on these dates we'll kind of meet with you guys. I know you're generally working on this kind of stuff a little bit behind on my email. Let me know what you guys are going to be doing on Monday and Tuesday. And yeah, they're advanced sort of people so they can - they just - I mean I just look at my email now, they wrote back with like the list of priorities that they're working on and the things they're purposed on and stuff like that so that's my process and it's like to build relationships with people and that's how I manage people. Tyrone: Nice. Okay so you're more of a hands off manager as you said. Basically, you hire these people with experience and also too that they've got the skills that you need them for. So basically it's like here's the role which is you're developing websites for these projects. I'm going to hand them over to you, you take it and you take responsiblity on doing those things and you basically manage. And I'll check in with you on a day to day basis or week to week basis. Is that how you pretty much go? Dan: Pretty much. I mean a lot of it too - as I don't - I basically make myself irrelevant. So I - I have a Photoshop person in the Philippines and I have a person who needs a lot of Photoshop in California so I introduced them. I like - some basic protocols in place like let's use Dropbox, here's how I want you guys email with each other, do out one Skype meeting and then I just say hey, you guys don't need me anymore. Tyrone: Yeah. Dan: So I try to get myself out of the stuff so I can focus on what I'm interested in the Tyrone: Yeah definitely. Dan: I know it's definitely help people get basic Photoshop tasks. I mean these people are Photoshop professionals. They don't need some bozo like me getting involved in their work so. Tyrone: You're not bozo. I guess you can say it's more like management Dan. You don't want someone to be overlooking on their backs all the time which is exactly how outsourcing should work actually. That's how we're supposed to be looking at. Talking about I guess communication, do you use any type of tools or anything like that to communicate with them and also to get the projects done? I know there's a lot of project management systems out there. Do you use any of them? Dan: I've tried them all. I've advocated them all and I've systematically failed at everything. Tyrone: Haha. Dan: Like just - clause of failure on our fronts. There's only two things that persisted. One is email and two is Skype. And so - ah I don't like office hour kind of stuff or everything and now it's like hey if you're working, please put your green light on on your Skype, that's it. And I mean the thing about it is like - I mean I think that there's a huge benefit to working for a lifestyle business you know. You set your own hours, you're responsible for results not hours at your desk. I am not tracking anybody's time, I don't care any of that stuff. So you know, you take to go with the bad like you don't have much control as a micro manager but I got this added benefit that people are excited about their jobs and I get to spend my time the way I want to as well. Ah yeah good with that. I'm not totally managing everything that's part of my business. I'm sort of saying the direction. It's like - I think things have been a little bit bgiger Tyrone, it's more like stirring a battleship. You've sort of set the direction and hope that your attitudes and philosophies are just sitting down on your organization. You just can't be managing everybody all the time. Also lose all your time. Tyrone: Yeah, absolutely. It comes back down to core values of you which you want to be able to speak out to the rest of your team and if they can really embrace that then really they're just going to take your ship on because all you're doing as being the captain and you're just giving really just the information that they need and they don't need the information directly from you, they can get it elsewhere which is exactly what you're doing. Dan: Yes. And you know there's no - I mean back to my original point is with my Filipino employees like there's no separate kind of thing. I mean they are just employees, they are just now part of the organization. They sort of get the same liberties and benefits that other employees would have. You know and - there's - so you know it's just the same way I would manage a California employee I am managing my folks in the Philippines. Tyrone: Yeah, it's a really different perspective on the way you've just talked about it is that yes, you don't track their hours. You're not managing or micro managing them. You're not getting them to be sending a report to you everyday. I might just assume that's right yeah? Dan: No. Tyrone: You don't do that. Dan: Don't bother. Tyrone: You don't bother. So like I know there's going to be people who are going to be asking on this podcast listening and say Dan, like how the heck you know what they're doing? I mean you've obviously been successful in getting a business to do a million dollar turnover in your business with all these people in your teams but how are you tracking your results. How are you managing those results and getting the results that you definitely desire? Dan: That's a good point I mean what metrics are you going to track in your business. For me it's top line revenue. And - and then bottomline profits. Those are the two numbers that I watch. I don't care what employee number 10 did on Wednesday morning. If that income is my scope of concern, ah - you know my business is going to suffer I think. So I think it's about - you know, when I go to the Philippines like I'm going to meet with my employees I'm going to share with them the plan. We actually go to resort together and have a party like - Tyrone: Nice. Dan: And so like for me, that's the top of a lot of stuff. I'm the CEO and that's the kind of stuff. But I'm not the CEO but - Tyrone: You don't need to be the CEO man. Dan: Yeah I don't know, I got the CEO with 12 person company. But - I am the owner and - so like those are the things that I'm sort of focused on. You know, you asked so how do I know what they're doing like well this morning I asked them. Hey what you're doing? Let me know I'm curious today. Let me know in a brief quick little email what you're focused on today then I can try to weigh in but I don't want to interrupt them either. A lot of times their priorities maybe a bit different to mine but if someone is jazzed up about hey this is a great design project, pump it out logos, do mockups or whatever. I let them go on that because I know how it feels to be interrupted myself. So yeah, I mean it depends on your business too I mean. So for me it's more a matter of - I'm not micro managing people because I know where that leads. It leads to me spending all my time looking over the shoulder of people that make - ah you know, frankly much less than I'll be making if I focus on the top line of my business. Tyrone: Yeah I mean like this is the interesting thing and this is the question I wanted to ask you is - as you've been developing over the years, you've been developing teams, you've grown your team, you've also hired and fired few people as well, how have you known that team members have not performed because obviously that comes to a certain point in your business. As you said some of the people you're hired in the past haven't stayed long - you know for the rest of your business. Where is the line where you're going to draw and say look this guy is not performing because you've got obviously come to some metrics and also say to them look this is you what you haven't been doing. Dan: Yeah so there's - let me back up the sharing about this whole issue of management. I decided last year that having the maximum amount of Filipinos was going to make the maximum amount of money and I need to control it. So instead of an office in Manila, I brought all my people and be grudgingly at 8AM in the morning and I sat there working until 6PM every night and I was like on all day long. Do you know how much productivity in my overall business went up? Tyrone: Zip. Dan: I have no idea. I can't figure it out. I literally sat on an office with these people for three months. I knew everything. I knew where they go for lunch, I knew everything and I had zero impact in my business except that everybody was freaking miserable. And so - I mean that was a big lesson for me Tyrone. It's like that was like - it was like Basecamp doesn't work, whatever like these cool little apps, they're not working for me. Somebody get an office - old school. I'm going to get everybody in there, I'm going to ask every morning what they're doing. I have meetings with them, breakouts, whiteboard and zip. Like I couldn't - and part of the issue, these are in many ways Tyrone, they're support staffs and so you know, we need to be focused on growing our business as an entrepreneur. So the critical decision was made in hiring these people and putting them to work and inspiring them. Managing day to day tasks I mean it's marginal. Tyrone: That's right. Dan: Now, how do you decide - you know whether or not to fire people. For me, I have this weird metric. I call it lift. So you look at an employee and you feel like are they lift, are they giving you leverage. Do you feel like they're being highly communicative to you? I mean that's the biggest thing to me is with the combination of people who are communicative and responsive and who actually dig in and give you lift. Not just people who are passing emails you know but people who you know, they dug in for two or three hours and they solve the problem. If I see a lack of that happening over the course of many weeks, I will have emergency meeting. Like just recently I flew to Manila to basically set my lead developer down and say what's going on brother? It became obvious to me that his heart was elsewhere and that he didn't see his big opportunity in my company and to me that's when it changes. I mean if - if I'm not getting lift from people and if I feel like they're dragging me down, I mean it's not a clean thing. I mean I think it's a judgment call for every entrepreneur to make it. It's always for me it's the toughest to make it and let somebody go. But some people make it easy for you. Tyrone: That's so true and that's a really good point there. And I sort of go by that metric as well but at the same time because I'm working remotely with the particular person, I need to also back that up and say these things are not being done so that way I can substantiate why the reasons I've got to let you go. Otherwise, if you just go off by gut feeling and don't substantiate or back it up then it doesn't look very good on you as well, too so that's the other thing. We always ask you know making sure that those things get done. Dan: Yup. Tyrone: That's really cool though. I guess one thing I just wanted to do because I think you've given us so many cool things, you've given us really the inside strategies of how your business works and how you've looked at it from the minset point of view and outsourcing, what I like to do is just before we finish up this podcast is to ask you, if you were to suggest one thing that you could recommend to people about outsourcing and what's worked for you in your business, what would be - what would the one thing be? Dan: Ah - okay. So outside of the idea that outsourcing employees is essentially hiring employees so taking that level of seriousness. I think the second thing is I think people think that outsourcing solves more problems than it doesn't. Outsourcing is essentially a cost effective to hire employees so hiring employees won't build you a business. I think a lot of people they see the promise of VAs as a way to get a business off the ground. I don't agree with that. I think before you hire VAs, you want to have found a scalable source of cashflow for your business. Once you've identified what's making your business money, that's the time that you plug in employees and you get them start to helping you grow that business or grow that source of cashflow. I mean this whole issue of like - well I've hired VAs, like what should I have them do for me? If you've got a sustainable source of income, that's a new question like I know exactly what I need. I need these people to be working on this source of cashflow, managing the clients, like optimizing the conversion rates. These questions melt away once you found that scalable source of income and that burdens on you as the entrepreneur. I see a lot of people maybe jump a little bit too quick on the whole VA thing and they haven't quite figured out how they're going to make their money. So I think look, hiring people in the Philippines isn't going to free up from the dirty work of being an entrepreneur which is figuring out how are you going to make money from this thing. So figure that out first and then that's when you plug in your employees. Tyrone: Yeah, that's absolutely, that's a really good tip. And I guess the action step for people is don't hire anyone unless you have a sustainable cashflow first before you decide to outsource to work. Dan: Or you have an investment plan. I'm okay with two. Yeah, of course. Tyrone: Yeah, absolutely. The investment plan would be important as well, too but you're going to make sure you can sustain that. Otherwise don't go ahead with doing that like that. So yeah that's awesome then Dan. Thank you so much for coming onto the call today. We've had an interesting chat and also too with an interesting breaking in between, have a little interval signs that worked out really well. Love to come over and visit you in Bali soon. Dan: You too. Tyrone: So I hope that you'll still be around there when I come over sometime soon. Dan: I will be. Tyrone: And yeah, if people want to get in contact with you, how can they find out a little bit more about your - business and yourself as well? Dan: Sure. Please do listen to the Lifestyle Business Podcast in front of the LifestyleBusinessPodcast.com. I do a bunch of other stuff on the internet too but you can find it all about it at that site. Tyrone: Awesome. Yeah, guys you guys have to check that out. I listen to it and a lot of entrepreneurs listen to it and I highly recommend it. It's actually one of my number one podcast that I put on the car since I go around driving so. Thanks very much for that. Dan: Thanks Tyrone, I appreciate that. Tyrone: Awesome. It's time for the Outsourcing Live quick tip. Recently I had my hard drive just crashed up on me and unfortunately I had to replace this hard drive and go through the process, the tedious process of reinstalling everything. But fortunately for me, I had already backed up a lot of my data. I tell you about 98% of all my data was already backed up online and that 2% was just the work that I had done that day unfortunately I hadn't back it up. But in saying that, I could recover 98% of my data all from online and this is really awesome tool called Backblaze which you can get access to it at www.outsourcinglive.com/backblaze. Spelled B-A-C-K-B-L-A-Z-E. And you can check it out there, it's a really awesome tool for about $3.96 per month if you go onto a yearly plan which is roughly equivalent to $50 a year. You can backup everything on your computer available for both PC and also Mac as well and it's got unlimited storage and I had almost close to 55 to 60GB available or backed up online. Nowadays I have both Time Machine which is my USB storage and also backup on the Backblaze server as well so this is a really great tool for you to be able to use for you to backup anything and you won't have to worry about losing anything. And also lastly, if you want to check out the How To Use The Backblaze System, I have created a special video post for you at Outsourcinglive.com/Backblaze-review and you can check out the step by step review on how I've used it and also how I've set it up as well. Now, if you like more resources like this one, you can find them inside Mass Outsource Mastermind along with video tutorials and step by step instructions showing exactly how I use them. To get a 30-day no risk trial membership to Mass Outsource Mastermind, simply visit FreeVideoSet.com. Until next time, I wish you success in your quest for outsourcing.