How To Grow From Owner-Operator To Owner-CEO

#78. What happens when your business outgrows YOU? in today's episode, Sevana and Tiffany take on business lessons from the story of Martin Eberhard, American inventor, engineer and entrepreneur who co-founded Tesla, Inc. (then Tesla Motors) and then was asked to leave. Topics in today's episode includes:

- how to eliminate the roles or "hats" that you put on as owner-operator so you can be CEO of your own business

- the importance of clarity for you and your ultimate role in your business

References:

Scaling Up - FACe Chart: https://coaches.scalingup.com/function-accountability-chart

CNN Interview: https://youtu.be/QIt8WuEQntY?si=dRKg-i9trnsHhDhd

Building a Skills Matrix: https://acquira.com/why-you-need-to-build-an-employee-skills-matrix-and-how-to-do-it/?utm_source=Blog&utm_medium=Article&utm_campaign=How-To-Turn-An-Owner-Run-Business-Into-A-Management-Run-Business

https://www.forbes.com/sites/forbescoachescouncil/2020/02/26/how-to-stop-operating-your-business-and-start-owning-it/?sh=36dc9a9e16ff

https://www.cleanlink.com/cp/article/Growing-Out-Of-The-Owner-Operator-Role--2476

https://www.theverge.com/23815634/tesla-elon-musk-origin-founder-twitter-land-of-the-giants

https://www.investopedia.com/articles/personal-finance/061915/story-behind-teslas-success.asp#:~:text=In%202001%2C%20Eberhard%20and%20Tarpenning,founded%20an%20online%20payments%20company.

https://innovators.berkeley.edu/spotlights/co-founder-marc-tarpenning-85-shows-off-teslas-baby-pictures/

https://www.businessinsider.com/tesla-cofounder-martin-eberhard-interview-history-elon-musk-ev-market-2023-2

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Got questions or have a topic you want Sevana and Tiffany to cover? Email us at thebusinessbehindsmallbusiness@gmail.com and see your question answers or topic of interest discussed on a future episode!

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About BBSB - We are two business owners with two very different perspectives on building business, and the business behind that in order to achieve your goals. One of us built to sell, and will continue on the serial entrepreneur path, which means your focus and drive should include very particular tools and tips in order to achieve your goal. The other, is building a generational business, one that can go on long after she’s let go of the wheel. This type of business also requires very specific tools and platforms to achieve this goal. Both women have been successful in their own right, but in honesty - haven’t scratched the surface! 

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Disclaimer - Details of today’s story was inspired by true events but are not based on proven facts. Also, we are NOT licensed financial experts, nor do we give financial advice. Anything we share with you here on our podcast, whether it be a personal experience or submission, or advice/tips that have worked for us, or that we believe would work for you should not be viewed as either financial, business, or tax advice. We ask for you to do your research, have open and honest conversations with your company’s own support providers and make decisions based upon that. Throughout this broadcast we will share our knowledge and give suggestions and hope you will receive them as part of your overall research to better your own company.

Transcript

SPEAKER_02 0:03

Imagine being really good at something. So good that the knowledge you have could change the world as we know it. Now, imagine you have a world-changing invention. This invention is so huge that your name really could go down in history. You might even win a Nobel Peace Prize. But before you can start writing your acceptance speech, the chairman of the board pushes you out because they deem you to have no use for this amazing thing that you've invented. That's what happened to Martin Eberhard, the co-founder and owner-operator of a now multi-billion dollar company that hit the limit of his role, and instead of growing and changing, he got booted. So welcome to our show, The Business Behind Small Business. Whether you're selling or staying, we're here to remind you that just because you own a business does not mean you are a business owner. We are your hosts, Savannah Stone and Tiffany K.O. Sharing the more finite details of entrepreneurship, revealing the dots between startup and success. No one gets to a million without getting a little dirty. There's a lot of business behind small business, so let's get to it. Before we begin, please note our disclaimer. This is available in both our show notes and on our website and should be referred to before and or after this podcast. And if you are watching, you will see my hands doing weird things and my head going back and forth. It's because my cat has decided that she wants to be a part of the show as well.

SPEAKER_03 1:40

It's quite entertaining. Her tail makes an appearance every once in a while. That's great. So great.

SPEAKER_02 1:46

Anyway. Normally she doesn't like to be. I mean, I don't know. She's been clinging lately, but I guess I shouldn't hate it. Most of the time she doesn't care about me until she needs to be fed. Anyway, um, so Martin Everhard grew up in a quaint town of Kensington, California. He was a great learner and profoundly inquisitive. After graduating from high school, he went to the University of Illinois, Urbana-Champaign, and received a BS in computer engineering in 1980, and later an MS in electrical engineering in 1984. With a brain full of knowledge and a heart full of hope, he started work as an electrical engineer at Wise Technology. Martin, an incredible engineer and full of innovative ideas, was led by the idea of creating technology that was more energy efficient. One day, in the late 1990s, Martin Everhard met Mark Tarponing at a social gathering and they found themselves an endless conversation. Mark grew up in Sacramento, California and had attended the University of California, Berkeley, obtaining a BA in computer science in 1995. After graduating, he went on to spend several years working for Textron in Saudi Arabia. He also traveled a lot with his work. Both held numerous positions in different types of companies, and both had also started and sold companies. They also had uh individually multiple trade uh not sorry, trademarks. Uh but their combined love for the same type of future, the same vision, kickstarted their desire to partner up for their newest adventure. Together they started their first company, Nouveau Media, building ebooks using lithium-ion batteries. So maybe this doesn't seem like such a big deal right now, but this is during a time when most books were in paper and publishing was still trying to be digital outside of a fax machine.

SPEAKER_03 3:50

You know, wasn't there yet by any means?

SPEAKER_02 3:52

It really was liquidy, yeah, no digital ink or anything like that yet. Right. So having content that was digitally available was mind-blowing.

SPEAKER_03 4:00

This is still the 90s, right?

SPEAKER_02 4:02

Yeah, this is the late 90s. They met in, I believe, 1997. So this is somewhere between 97 and they sold the company in 2000. So Eberhard felt that there were more to lithium-ion batteries than just ebook readers. The pair had a format in how they wanted to create businesses. Study, disrupt, delight. And they wanted to carry that into their next venture. Eberhard had recently divorced and he wanted to buy a new sports car. The two of them had had multiple conversations about the problems with oil, and so the timing seemed right for them to investigate what their new new focus ought to be. Mind you, they also had a company that built lithium-ion batteries, but when he went to the company to the to the head of engineering to ask for a larger capacity lithium ion battery, they just did not have the technology for that. And so he wondered, okay, well, how can we how can we create something that's going to be larger that could be used in a in a way that would become eventually mainstream? So the two men knew that transportation had to be their new focus. So how would they break into the car industry? So they poured themselves into as much knowledge as they could get about how cars are made, how they're sold, how they're consumed, who sold the cars, how would you sell a car, who would buy the car, uh, would you have to go to a dealership? Do people even enjoy going to a dealership? What was it that they could do to enhance or improve all of these experiences? So, as I said, uh lithium-ion batteries uh and the technology behind that was still improving. And uh, we were still only a few years into the new millennia at that time. And people, both consumers and makers, were hungry for the new next big thing. There was a lot of stuff happening at that time, and in all in all industries. Tarping and Eberhard had to study their customers to figure out what product they needed to create that would be something that people would want, and what kind of people were going to want them. So they started to drive around and looked in people's driveways. What kind of cars did everyone have? What they saw was mere grassroots research. I mean, this was, I think, very, very brilliant of them. Uh so what they saw on those California streets was that everyone had a Prius and a secondary car. Most often, the secondary car was some form of a luxury or high-end car or an SUV or luxury SUV, so that they knew their customers were not penny-pinching tree huggers. These are people who wanted their luxury, but to also send a signal that they cared about Earth. And in their words, quote, our conclusion was that customers were not buying these cars to save money. These people weren't concerned with how much money they were spending on gas. Every driveway in Palo Alto had the Porsche and the Prius, and the owner spent more on lattes than they than they did on gasoline. Now that they knew who their consumers would be, right?

SPEAKER_03 7:21

Like that's so cool. I feel like that's a small subject of the rest of the US. You know, now that they're in Palo Alto, now I understand why they came to that particular conclusion. Absolutely.

SPEAKER_02 7:32

Well, that they they also knew that there were pockets around the country that were like Palo Alto. Yeah. You know, yeah. It wasn't so exclusive to Palo Alto that they were building, it was just that that that there were pockets of people that lived like that. Um so they were very clear as to their target audience, clearly. Absolutely. Uh, you know, these are people, like they said, that are driving a Porsche and a Prius, which is all over the country.

SPEAKER_01 7:58

So now that they knew who their customers or their consumers would be, they began working on the product itself.

SPEAKER_02 8:08

They both knew that this was not going to be a small task and it was going to take more money than they had. Although they had sold their last company for close to $200 million, it was, I think, $187 million, something like that. They would need more seed money if this idea of theirs was going to work. So these consumers did not have Priuses because they thought they were beautiful cars. They had Priuses because they wanted to put on display to everyone that they cared about gas mileage. So they concluded that this car had to have little impact on the earth, but also beautiful to drive as well. In my opinion, they're not beautiful, but whatever. Um, in 2001, the men attended a Mars meeting, a Mars Society meeting, sorry, meeting at Stanford. There they met a speaker. He was a quirky gentleman with a lot of money and vision. Uh, this gentleman also had been a disruptor, had also created products and a platform that also revolutionized the way we do things. And after that, they approached him to share their common ideas and visions for the future. The three men had a shared love for space and building a sustainable future. And uh this this gentleman was the right kind of person to connect themselves with to take their vision to the next level. This was, of course, Elon Musk.

SPEAKER_03 9:36

I'd say how quirky would you say quirky is?

SPEAKER_02 9:41

Pretty quirky. Pretty quirky. Well to say, he's quite quirky. Yeah. They would say more uh different words. They would use different words. I used quirky. That was not what they would say. Um, but if you take my my advice when we get to uh you know the books and and apps and stuff like that, when we get to our suggestions and you do happen to take up, then you'll get a better sense of what their true opinion, first opinion was of Musk. Any hoozles. So Everhard and Tarponing went through their initial rounds of investing with venture capital firms. And Musk led them through additional rounds of funding. Now, the reason why they thought that Musk would be a good person for them to uh partner with is because Musk had gone through, or rather, had had more experience with uh venture capital um investment investing or in in those rounds. Eberhard and Tarponing had not had as much uh experience and influence. So that's why they brought Musk in. Yeah, well the VC circle is pretty small. So Right Right, and this was their way into the VC circle. So soon after the men were armed with the Capitol, Musk joined the company as the head of the board of directors. Uh so according to an interview he did with the Business Insider, which is going to be linked in our show notes, Everhard described the early days of working with Musk as much more hands-on with his companies, with his own, like Musk's companies, than he was at uh with Tesla during Eberhard's uh tenure. Elon is a different person now than he was then, Everhard said. He was no more involved than any other board member. He came to board meetings, he did not have an office at the company, he didn't come there regularly, he did not give direction to my employees or anything like that. He was just a regular board member. Eberhard said that while he was the CEO and Musk was the chairman of the board, Musk came to the board meetings monthly, he didn't regularly work at the company, but that's only until Tesla started to get media attention. Eberhard continued in the interview. His behavior changed dramatically as soon as we started having press about Tesla. Eberhard said he got mad if anything was ever written about Tesla and it didn't feature his name prominently. That's when I realized that there was an ego involved here that I had not recognized before. Eberhard, who at the time had the nickname Mr. Tesla, said that any time Musk wasn't mentioned in an article about the company, Musk would call him and scream at him. So I'm not coming to Musk's defense here. However, the reason why Mutt Musk felt it so important for his name to be more prominently featured is because Musk really was a huge influence on how they got their money and why they got their money. Tesla honestly probably would not had made had made it off of the drawing board if Musk had not used his own muscle and connections to get these guys their money. And that is the reason why he wanted it to be known that Musk was the influence. Musk was should he felt he should have been more prominently featured as having brought Tesla to the forefront.

SPEAKER_03 13:03

So he wanted the recognition as well. I mean justified, not justified, whatever you want to call it. But the fact is, it sounds like, you know, Elon Musk really wanted to make sure people knew that he was involved in this company, even though it sounds like behind the scenes he may be far more hands-off. Getting the money is kind of a big deal. It is.

SPEAKER_02 13:23

And uh, you know, this isn't the first time this has ever happened, right? Like Ray Kroc brought took the McDonald's uh brothers and turned it into a giant empire, right? Like Coca-Cola, even Pepsi. Like there are so many companies out there that we know that are mainstream companies that uh the person who invented it, uh maybe by then it got sold to the person who turned it into a multi-million billion dollar company. But that's how uh Musk saw himself. He may not have been the inventor, but he certainly was the person that turned it into a business.

SPEAKER_03 13:57

Um he felt like he was a catalyst to it all, which isn't untrue.

SPEAKER_02 14:02

Uh-huh.

SPEAKER_03 14:03

No. I don't know. It sounds like it sounds like they need to work it out amongst themselves how much credit needs to be given where. Sounds like there's a little dis dissatisfaction there.

SPEAKER_02 14:13

Well, yes. And according to Musk, Eberhard and Tarponing were great inventors and they were visionaries, but that they lacked the business acumen that was necessary to build and then manage and maintain a multi-million billion dollar company. The men wouldn't fire people that needed to be gone, and they were not moving on decisions that needed to be made quickly. Um, according to Eberhard in an interview with The Verge, where this link will also be in our show notes, Musk began to exert his authority as board chairman, pressuring Eberhard to fire people, making it wildly difficult, or rather making wildly difficult design fixes to the company's early lineup of EVs, and then forced aside as Musk positioned himself at the forefront of Tesla's public introduction to the world. These days, everyone seems to believe the narrative that Musk is this incredible genius, uh, able to not only send rockets to space and run a successful social media platform, but that he has also invented and brought EV cars to the mainstream masses, which we all know is not the case. Eberhard and Tarponing were the geniuses behind the Tesla brand, but unfortunately for them, their demise came from their limitations on the game of business and who to invite to the table. Yeah. So any any uh thoughts before we switch gears?

SPEAKER_03 15:37

Well, I mean, so did they so they they essentially so when did they leave the company? Like, or when were they asked to leave the company, it sounds like it was soon thereafter.

SPEAKER_02 15:47

Uh I want to say it was in 2007. Um I want to see it was in 2003. So they they were they were asked to leave or booted pretty soon thereafter.

SPEAKER_03 16:00

So they were one kind of the original founders, it sounds like, per se, of Tesla, right?

SPEAKER_02 16:06

They were the original founders, and they were also there were also two other men. I think there were two other men or three other men that were also involved. I didn't mention them because I didn't feel like they were as um impact. Impact the players. Yeah, they weren't as big players. Um, but you know, and also Musk was not the fourth CEO that they had that the company had had. So, you know, there were a lot of different players in this, but the way Musk saw it, and he managed to convince the board of this as well, was that know how to run a business. I don't know, it's not just about me knowing how to create a business, right? Because Eberhard and Tarpening had created businesses, uh, but what they did was they create technologies, technological businesses. It wasn't the same thing. And this was a car company that was entering into an industry that was um that had over a century-old players in it. This is not like uh a tech startup where the tech startups are are coming every day. Car industry is totally different, and that's what Musk was saying was that I don't, it's not that I know how to start a business and sell a business, I know how to run a business. And Eberhard and Tarponing don't know how to run a business, they know how to start a business and sell a business. And that was how he was able to convince the board that the two men had to either go to a different, be put in a different position, or just be gone. Well, in the meantime, tarponing had already uh resigned. He resigned well before Everhard. Everhard held on because I mean his ego was involved as well. He felt like this is my baby, and I should be, I should continue to be at the head of the business. And the way Elon saw it and the rest of the board saw it is that Elon knows how to run a business, he should be the CEO, and you should be on the board.

SPEAKER_01 18:02

Wow.

SPEAKER_02 18:03

Which he is on the board. He does still have a stake in the company, you know, he does, but you know, this is the place in which these owner operators could not seem to grow out of their owner operator places. Because as you're going to go into it, an owner operator, for the sake of the growth of their company, have to be able to grow out of that owner operator's place. Um, and and I think that that's where they just couldn't grow out of the operator part. You can still be an owner, but not the operator.

SPEAKER_03 18:40

So well, and it's interesting in their situation too, because it's, I feel like their ego may have been reinforced by their previous success, right? Like almost false indicators in a sense, not realizing that the situation has changed, they're in different industry. Like you said, they're trying to disrupt a really old industry that probably needs different skill sets and different strategies for you to get there, but they may have been, and we've seen this a lot of times where owners kind of receive false positives, false reinforcements of just success. I mean, to be quite honest, we see this a lot in government contractors, a lot, right? Because government contractors have this crazy trajectory where they can go from zero to a hundred literally within a week or two because they get they received this contract and they spend all their time trying to get this multi-million dollar, probably first contract. And once they get it, they didn't spend any time learning how to run the business. And while most business owners have five to maybe six years or seven years to learn all of the things to run a business, these owners are all of a sudden at a business that's multi-million, but they didn't have the time to actually learn how to run the business properly. And so they but then because of the fact that they have this, you know, revenue that they're earning on the books that they can tell people about that about, it kind of reinforces the fact that they feel like they can run a business because they think running a business is just getting this top line sales coming in. And of course, how you know the as we say, there's a lot of business behind small business, it's not just about sales and marketing, and and that's it. Yeah, so that's so interesting that on that level they kind of ran into the same issue. And it sounds like from their point of view, Elon Musk kind of strong armed his way in, right? Basically, to the CEO position. And they're saying, Hey, I founded this company, why am I getting pushed out? I should, you know, be as much of a contender as you are, if not more so, because they feel like they founded the idea. And yeah, and oftentimes I think what happens is you, you know, as an owner, you do have, I feel like, ownership over your idea, right? And then you fall in love with it. But then I feel like once you start a business, it is also your duty to make sure that that business will survive beyond you and what your capabilities are. And sometimes that's a hard reality to admit to, that maybe you don't have what it takes to take it to the next level. Even though you want the next level, right? I mean, and this is again for owners who want the next level, but that they themselves don't have the skill sets to actually take it there, and they refuse to recognize the fact that they don't have what in what needs to happen or they know what needs to happen in order to get the business to the level that they have set their goals on.

SPEAKER_02 21:30

Right. And this is where we talk about the whole, are you creating a business or are you creating a job? And I feel like if you if you position your thought on or your mindset, or rather not position your, it's more like if you change the narrative from owner operator to owner worker, you know, like if you think about operator being you're working in inside of your company, because that's what essentially you're doing. You're you're doing things that maybe you don't. Need to be doing. Maybe you could be hiring somebody else to do it. You may think that you could you're the best person for this job, but what qualifies you to do this when someone else who's been doing it for many, many, many, many years, how is it that they're not more qualified than you? Your company can't be so special. I I hate to break it to you, but nobody has a company that is so special and so unique that only you can do this. I I don't know that there is such a thing.

SPEAKER_03 22:31

We tell ourselves that sometimes uh for sure. Yeah, to feed our own ego, to feed our own significance, but nothing. You're absolutely right. Nothing, there is no business out there that is so unique that somebody else can't come along and run it as well.

SPEAKER_02 22:48

Well, both because I'm not I'm gonna say both men because Tarponing had already resigned at that point. Like he had already tapped out. He was like, I'm done, I'm not even gonna mess around with any of this. Adios, bye-bye. So this was really between Eberhard and Musk, fell aware of when things came to a head. And I think both men were very correct, were very right, but they were also very wrong. There's a lot of things in which both men could have done things differently. It didn't need to make it all the way to a lawsuit and claims of defamation and libel and all this other stuff um uh that ended up going them going to court for and lawsuits over. It just it got really, really ugly between these two men. Uh because Elon was was throwing so much shade towards uh Eberhard, and Eberhard was doing the same thing towards Elon. I mean, it just both men I think had way too much of their ego into a company that really truly didn't belong to either one of them.

SPEAKER_03 23:54

Right.

SPEAKER_02 23:54

Yeah, you know, like yes, belongs to them, but really truly it belongs to the consumers. At least that's the way I see it. I see it like your company belongs to the consumers. You're because if you don't have, if you're not making your consumers happy, and if your focus is not on the consumers, your focus is on you and where your what your position should be, your give me, me, me, me, me. If you're not doing it on the consumers, then what kind of company are you really running here? Are you running a company that is meant to one, create a job for you, two, create of this hole that you have in your heart of being needed by somebody? Um, you know, like what what are we getting at here? Um, so that's what I mean by that. Like I think that both men put those above a company that really should have been fully focused on the consumer and not on them. So that's why we're talking about this, right? Because that that owner-operator role, and that's what our our our our show is that well, that's what you're gonna talk about, Tiffany, is how to um, you know, get yourself out of that owner-operator role and what are the ways in which you can get yourself out of that owner-operator role. Um, because you can be your company's own demise. This is the reason why uh, you know, a lot of companies go go broke after five years. Um, because that's generally the time in which they see success. That's generally the time in which, you know, the different forms of success, right? Success can be they've now reached uh more than, I don't know, 10 employees, they've now reached more than, I don't know, a hundred clients, whatever that success might be. So so now what? Are you gonna run run around chasing your tail or are you gonna actually like create um create ways in which you can like you know and enjoy your enjoy the this wonderful thing that you've built?

SPEAKER_01 25:44

But um but before we switch gears, we are going to take a quick break.

SPEAKER_02 25:53

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SPEAKER_03 26:36

So I think the the crossover from owner-operator to somebody who is truly owner-CEO is a very hard chasm for any business owner to cross. Now, the one thing that has is common across all business owners is that we all come up against this chasm at some point. And we all have to kind of figure out how to get across that to the other side where you become that ownerslash CEO. That I would like to argue that most business owners go into business visualizing that that is where they're going to be. Yes. But more often than not, we see a lot of owners getting stuck in this owner-operator role where you created a job for yourself. Uh you created the nine to five to your for yourself or the nine to nine or seven days a week because you don't have a way to exit and escape, and you become the glue to your business. Like you're the reason why everything works. Um, and they call you owner-operator because you're literally operating every part of the business. And this will happen to you too, even if you have employees, because you have employees who are not uh self-sufficient or employees who cannot operate independently without you, or you don't have a manager in place, then you're still the owner-operator. Just because you have employees doesn't immediately qualify you as a CEO by any means. Right. So, like, and at what level this happens is different for everybody. Um, it depends what kind of business you're in. But trust me, everybody has to go through it. So let's kind of talk about the ways you can get yourself out of this owner-operator role. Uh, one is to recognize the fact you're in it. That helps.

SPEAKER_02 28:12

What is that? Like uh the first step to addiction is uh awareness you have admitting you have a problem.

SPEAKER_03 28:20

But it is like every business owner who gets into business, I don't care who you are and how altruistic your, you know, may seem, we all have egos. And that's why we're in business. That's how what gets us in. So we all have egos we need to overcome. So the first step is to admit that you have this issue where maybe your identity is a little too tied to your business. Maybe you do enjoy the fact that clients can get a hold of you whenever they want, and your employees can call you to solve their problems for them whenever they want. Maybe you are a little addicted to that particular role. But, you know, that is in with where you want to be and the reason why you got into business is to eventually be able to detach and, you know, go sit on the metaphorical beach and sifting your Mai Thai or margarita, whatever you want to call it, right? Like, you know, not the same thing. You can't have both unless you have a cell phone with you on that beach and your cell phone's blowing up all the time because you know you're not physically here and people are looking for you. So step one, admit to your fact that you have this problem, right? Then step two, um, assess what is it that you are doing in your business for your business right now. Right. Um, I think is it in, I believe it's in the book Scaling Up um by the guy's name who for some reason eludes me right now. Shoot. Give me a second. You have the books while I do this. I was like, I have the book on a bookshelf somewhere though. But the idea about like in scaling up, there's a uh great one-sheet workout, which you can either you can probably Google it online once Ivana finds it and you can find the one-sheeter. There you go. What's the name of who's the author? Vern Harnish. Thank you.

SPEAKER_01 30:04

You're welcome.

SPEAKER_03 30:05

Vern Harnish. Um, he's also the founder of Entrepreneurs Organization, EO, if you heard of that, and all that fun jazz. But in the in the book, there is like a portion where there's a worksheet. And um, like I said, you can actually get the worksheet or you can just mock it up yourself. But essentially it has you writing out all of the roles in which you fulfill right now in a business, right? So it's CEO, CFO, administrator, you know, every role that you basically playing your business right now. And uh um, and then every role that's played by somebody else in a business. And that gives you a pretty quick assessment as to how integral you are to your business, meaning that your business cannot operate without you, uh, which shows you how deep you are in as the owner operator. Right. So once you admit you have a problem, it's time to assess and kind of see where you are and how how far you have to go between where you are today and where you want to be. Yeah.

unknown 31:02

Yep.

SPEAKER_03 31:03

And don't be surprised that even if you have employees, maybe you are still 90, 95% of that entire list. It happens to all of us, right? And then from that is when you start planning your, I would like to say how to fire yourself from each role. Yep. One at a time. I agree. Back yourself out, right? And it is it's one role at a time. It's not the answer, it's not always how go hire somebody new. It could be you have somebody internally that you simply need to have a discussion with them and shift their responsibility. It could be that there is a software solution for this. Maybe something you're doing can be automated. Um, and some of that could be like email automation, it could be response automation. Um, a lot of this, you know, with the three software we have available at fingertips, it might be a whole lot more cost effective to spend the time implementing a software rather than hiring a new person.

SPEAKER_01 31:58

Right.

SPEAKER_03 31:58

And then sometimes it is you need to go out and recruit somebody new for a very integral position. But once you have clarity as to which role you're trying to back out of and you prioritize what you can effectively do, like do you really, then you can decide, you know, hire a new person, uh, promote somebody from within, or um get a software to basically re uh replace and automate that feature in your business.

SPEAKER_01 32:22

Yeah.

SPEAKER_02 32:23

So go ahead. Um, I I think, well, at least for me, what I did was I made a list of all the things I don't like to do, and and then I made a list of all the things that I really love to do. And I kept the things that I do enjoy. Um although I do have the things that I do enjoy doing, I do have it written down how I do those things so that when I go on a vacation or or whatever, uh someone else on my team knows how to do it. Like in my management, it's not like I can only be done by me. It's just I've kind of chosen this is the thing that I want to be doing, but you know, you can do it if you want, um, which is such a wonderful place to be because then it doesn't matter when I go on vacation, it doesn't matter when I decide uh, you know, I need to have a day off or or whatever, somebody else can do that. And that's the position in which you want to be in in your company. Mm-hmm.

SPEAKER_03 33:23

Yeah, I think the great thing about approaching it from like a list format. And I think like absolutely, you know, when you're looking at all of the roles and where you fulfill, certainly divide that up between what you like to do and what you don't like to do. I would argue that if it is not, if it's not going to crash and burn your business for you to move remove yourself from a role that you don't like to do right away, um, that should be the first thing you you you kind of let go from your plate because you already hate doing it, which means it probably sucks a lot of energy out of you. So why keep keep on it? Right.

SPEAKER_02 33:55

Um but yeah, but then from I'm sorry, not to cut you off, but also it could be the thing that you don't understand that well. Like maybe it is something that you don't hate doing, you just don't fully understand how to do it, or maybe you have to, there's a large learning curve. It could be that too.

SPEAKER_03 34:10

Yeah, it could definitely be that. So it's just being able to know fully what needs to be done in your business. Now, I think for businesses that are a little bit younger, it's probably better to start off from a viewpoint of um a list or knowing kind of all of the aspects of business that needs to be covered. Because if you're new, you may not even know what you're missing. Um, so if you have a list that's a little more complete, then you can kind of go in and think about, oh, you know, I didn't really, I didn't really think I need to spend that much time on marketing or I didn't need to spend this much time. And um, that's an integral part of my business. Maybe I should think about that role that needs to be fulfilled in the business. Um, so yeah, so after that, I mean, figuring out what stuff you need to offload. If you're hiring somebody new, uh kind of like how Savannah has done it, which is to write everything down and have a process so somebody else can follow it. But that's where you get into onboarding and training. Right. Well done. And so, you know, to be transparent about it, hiring somebody new and onboarding and training, if it's especially if you're in a business where you don't have too many employees like that already, it's gonna take you time to build that process up. So that's probably gonna be something that's gonna take a really, really long time, a much longer time than you probably would like to be able to replace yourself in that role. The other way is also to outsource it. Um, and that you probably spend a little bit less time onboarding because you're assuming you're outsourcing it to professionals who yeah, who work who works in that, you know, uh the specialty so much that the onboarding time shouldn't take as long. But there's still a little bit of onboarding time. So don't think you can just magically drop it in their laps and run the other way.

SPEAKER_02 35:49

Well, well, you can only hope that they'll already know what questions to ask you. So, you know, whatever it is that you're onboarding, you know, like if you're if you're gonna be outsourcing marketing, let's say, you would hope that they know what questions to ask you. So maybe they're maybe there are things that you don't know that that you didn't know you were supposed to know. But when they ask you, you're like, oh, I didn't think about that. You know, so yeah.

SPEAKER_03 36:10

Well, the great thing about having a uh the right and good outsourcing ship is you do get that push and pull, you get that more of a partnership feel. Whereas a lot of times when you hire somebody, unless you're hiring them on a very managerial or executive level, yeah, they are somewhat waiting for your instructions, right? Right, which puts the burden on you further as a business owner. So that's something that you you need to think about and whether or not you have the capacity to take that on, because maybe the short-term answer is to outsource and eventually hire when you have more time. Yeah. Um, especially like you said, Savannah, in the area of maybe you don't understand as much. And that way you're gonna learn enough to be dangerous to be able to hire properly in the future. So that's a great way of doing it. The other way, of course, is to hire internally. So, I mean, if you recognize talent you already have that you can simply elevate or promote, that's always the best way to go because you know they're already integrated into your culture, like they know how you work and they enjoy working for you. Obviously, that's why they're there. That would be a much easier way for you to kind of relieve yourself from that role.

SPEAKER_02 37:11

Yes, I know. That is exactly what I did. So thanks.

SPEAKER_03 37:18

And Savannah has confirmation that she, you know, did all the right things. Yeah. And that's why she has time to be here on the podcast. Hey, yeah, doing the fun stuff.

SPEAKER_02 37:29

Yeah, yeah. No, you're right. Uh, I did not want when I was uh looking to create I created the account manager role. When I created that account manager role for my company, I didn't necessarily wanted to want to hire somebody new because I wanted it to be about someone, I wanted it to be someone who already knew and understood me and also our processes. So that's what I did. I I took one of actually the woman that had worked for me the longest who had been with me through all of the different changes that we had been through, and also because of her background, I promoted her. Um and well, my admin role started with the person who is still the admin. So again, had an admin role, but wanted to hire someone in new because the admin role was going to was a brand new position that did not have to do with well rather that all of it was new, which is why I wanted somebody new, not someone with preconceived notions of how the how the work is going to be done, because we didn't know how the work was going to be done. So we created everything together. That was why I hired one person new and one person was promoted.

SPEAKER_03 38:42

Yeah, and that's working out really well for you right now, right?

SPEAKER_02 38:45

It works out fantastic for me because there's there's so many like we had our meeting, uh we had our um touch base meeting before we you and I were recording, and there were things that they were talking about that I was like, what happened? Like I didn't even know that this thing happened. Like they tell they what's fantastic is that they tell me about what happened, the drama, they tell me about the drama, but then they also tell me of how they resolved it. Like friggin' amazing. It it it's like the best kind of meeting to have. Okay, here was the drama. This is something that happened, and this is how we resolved it. It got resolved last week or whatever. And I and I hear about it afterwards, and I'm like, okay, cool. Thanks for letting me know.

SPEAKER_03 39:26

So and so, like, how long since you had that notion in mind to do this to when it actually you you're getting to the point where you are now where it is working the way you designed it, like kind of just like in reality, like how long of a time did that take?

SPEAKER_02 39:40

So I started the company in 2011. I hired my first person in 2017. Then in 2018 is when I started formulating all of my processes. How do I do things? How do I what do I want to be doing as opposed to what do I not want to be doing? So that took from 2018 to 2020. 2020 is when I hired uh my current admin, Cindy, and then hired more people in between 20 and 23, and then I recognized that in 23 I really needed to have an account manager because I had a lot of moving parts, and that was when I promoted Sandy, who had been with me since 2017, to account manager.

SPEAKER_03 40:24

Yeah, yeah. So you could sound like you had a little bit of a quicker ramp up because Sandy was probably pretty already in tune with all the things that you do and evolved with the company, right? Yeah. And so that's why, you know, if you're able to promote within, I feel like that's that's always the better faster way to do it.

SPEAKER_02 40:40

I do agree. I do agree. Yeah, because I didn't need to teach her. Rather, it wasn't so much about teaching her anything, it wasn't that I had to necessarily train her on anything because she already came, you know, fully loaded. But she also had seen all of the different evolutions of the company. Right. Yeah. So, like when I hired her, like up between 11 and 17, it was just me. So I didn't have like how do you do this? Well, I don't know, I just do it, right? So that's why I took 2018 to 2020 to write everything down, and then between 18 and 23, she saw how I changed the company. She was a part of all of the evolutions of processes and all of the evolutions of everything. And she had ways, she was like, Remember when you did that thing, like that really worked, let's bring this back. Or I know we've been doing this thing for a while, but I feel like this could be a better way to do it. Let's let's change that to this.

SPEAKER_03 41:39

So it wouldn't have worked with a new person who didn't have that historical without having the history and context to figure out where how you're turning that, turning the company to a different direction. Yeah. Yeah. And you know, I think also, you know, I think one, of course, getting a great hire is also the key to this, too, right? So obviously you you really have a great talent in what you have there. So you're able to actually do this within your company. Um, I think at the end of the day, it does come down to that. It's also having a great hire because that was the opposite of that. I I didn't know how to recruit really well, I didn't know how to hire very well. So I actually went through a few duds before I recognized the skill set and who to be able to hire properly for the for the business. And because of that, it set me back and took me a lot longer to get this set up. Um, so I think it it sounds like it took you probably a little bit, about a year to get Sandy in her position and doing what she did. It probably took me about two or three years because I had a couple years there where I just didn't hire the right people, yeah not knowing. So I guess that all that's to say is that it's not a quick journey to go from owner operator to owner CEO. It's just not a quick journey. It is one role at a time, and it gets a little bit quicker because then you get a little bit better at it, right? You get a little better about firing yourself out of each role, but it's not a quick overnight. We're talking at least 12 months, depending on what size your business is.

SPEAKER_02 43:04

Absolutely. So that's great that you're making that point because you know it did take me from I mean, I was also, you know, raising kids at the same time, right? Like I was still I was still trying to balance my life between children and and running the business. And I also like stumbled a few times, and and there was COVID, right? So there was also um the problems with um, you know, companies closing and uh people getting sick, and just there was there was a lot of mayhem. So maybe it wouldn't have taken me so long, but it did take me five years to get from recognizing what I wanted and how I wanted it, then who I wanted to be and how I wanted to present myself. So all of the evolution of all of those things took me five years, but I'd say it would take most people anywhere from a year to three years. So Forgive you if you feel like it's taking too long.

SPEAKER_03 44:04

I'll say the key ingredient in what you just said is finding clarity as to how you want your business to be set up and what your role is in it ultimately. I will say that part of the reason why it also took me so long, not only did I have bad hires, which is completely on me, but also because I wasn't very clear as to what my end game was and what I wanted to, what I what role I wanted to be in ultimately for the business to know where I'm headed with this strategy. And so I think that's probably of the time period it takes you to actually implement this and get it executed to the place where you do start backing off roles. I think that part of trying to figure out what that looks like, the clarity of what role are you best at serving your business at the end of the day to also get you to the goal of where you want to be. So one, you need to know what the goal is, right? Do you want a $10 million business? Do you want a million dollar business? Do you want a lifestyle business? What is it that you want? Because there's no right answer. There's just the answer that you want. And once you, you know, have that answer, then the way to get there is very different. Right. Right. So if you want a lifestyle business, but you want to hit a certain amount in revenue, maybe your answer is spending more time trying to find the right softwares to be able to automate your processes than hiring people, because then hiring people doesn't allow you to have the lifestyle business.

SPEAKER_01 45:23

Right.

SPEAKER_03 45:24

Right. So it's it's like decisions like that. So the key is you got to spend some time on finding that clarity. And not everybody is made to be a CEO. Nope. As we said in our uh example today, in our business story today, um, I mean, mind you, it depends on whose opinion you're asking, but clearly Musk didn't think that um the two inventors could be CEO, even though they thought they can be CEO. But you know, Must is coming along saying, I got the money, I have the business acumen to do this. And um, I hate to say it, but it sounds like he kind of proved himself right with where Tesla is today.

SPEAKER_02 46:02

Right.

SPEAKER_03 46:02

So yeah, there is that hard truth.

SPEAKER_02 46:04

Yeah, and I mean there was a board in play, right? Like we don't really know what happened behind closed doors. Nobody, but yeah, after all, the board ultimately did decided with him. Right. So you know, there's always what three sides together story, so yeah.

SPEAKER_03 46:24

Think think about it this way too, right? I and again, this is my speculation, but I imagine that they invented this amazing lithium battery, right? Lithium ion battery, sorry. They they invented this great invention, and I would almost guess that they wanted it to, they wanted to be known for this worldwide, famous in history for it, which means they want this company to be way bigger than themselves. They wanted it so that everybody knew about this, it became wildly profitable, and they want a part of that glory. And that's okay. But you also need to recognize that to get to that level of business, you need to have a certain amount of experience and certain amount of money. And whether or not they were truthful with themselves, if they had the ability to do that, clearly the board made the decision for them and said, We think Must is the person to get to that goal. So again, it goes back to being clear on what you want and then admitting to yourself, do you have the capabilities of doing that? Because it wouldn't be the first startup where the board decided to put in a CEO that is not the founder, right? Because they just recognize you're a great inventor, but you don't know Jack really about running a business. And and there are successes that there are businesses where they succeed, succeed, meaning like those two guys who had a previous business, made millions, sold it. Yep, right. There are successes that would give you the false reinvent that those exact same skill set would fit in this particular situation, right? Yeah, so it's brutal honesty with yourself.

SPEAKER_02 47:59

Yeah. There are a lot of companies to choose from when trying to choose uh selecting who to write about. So you're not wrong.

SPEAKER_03 48:08

Yes, exactly. So there's there's a lot of examples there, but I think it all comes down the great thing about business is you can make it whatever you want it to be. I think the tough part is figuring out what do you want it to be.

SPEAKER_02 48:21

Yeah, exactly. So in saying that, there's a saying that goes, put your money where your mouth is. And we're going to drill down a bit further here to connect what we've discussed at a granular level to tangible sources you can take to get to that next level. So Timmy.

SPEAKER_03 48:39

So I think my my source is definitely the scaling up book. Um and I think actually the um worksheet I'm talking about is available online for download. I just we'll find it and we'll put it in the show notes, and it'll be a place to start. Um I forget what it's called, but I recall the worksheet pretty clearly.

SPEAKER_02 48:57

Uh, this is a phenomenal book. Um, I do agree. Yes. And there are worksheets in here. Um, like this is what they look like. Because it's just a sample one that I'm showing you. But yeah, you know, really, really cool book. Great book to have and to come back to again and again.

SPEAKER_03 49:16

Which is why you have a copy, and so do I.

SPEAKER_02 49:18

Yep, that's right.

SPEAKER_03 49:21

Do you have any other suggestions? No, no, no. I think that would that was pretty much what I had I had in mind there. The rest of it, it sounds like uh I sound, I guess, to wrap up my advice is that our listeners uh may find themselves needing to do a little uh soul searching and a little bit of uh self-honesty to uh figure out what the next step is for them, especially if they are uh discovering that the owner-operator role may not be the position they want to be in in the long term.

SPEAKER_02 49:47

I agree. Well, um, I've got a few suggestions. So I'm gonna start with books. There's uh this book as well. It's called uh What Happens Now by John Hillen and Mark Nevins. This is a phenomenal book as well. I also very strongly encourage you to read Scaling Up. Um just even as a just just to have it is a is a it's a phenomenal book. Um also I've got uh Power Play, Tesla, Elon Musk, and The Bet of the Century by Tim Higgins, which follows the original founders of Tesla, uh which of course include Tapperning, uh Tarponing and uh Everhard, but also include the other gentlemen who were involved before Elon Musk, whom I didn't include in my discussion today, as I mentioned. Um next, um, we're going to be linking the CNBC interview with the two gentlemen who tell their story in their own words. It's a fantastic documentary. It's just under an hour long. Um, really, really great watch. Uh, personally, I suggest pretty much the same tips to uh come out of the owner-operator role, set a vision, establishing a clear vision for where where you want to take the business, uh, then delegating, delegate tasks one at a time, um, hire a team and consider factors like ambition, problem solving, and personal growth when you're hiring these persons and build a plan. Create a strategy with short and long-term goals with action items for both in order to achieve them. And uh on your own time, of course, you should take time to create a skills matrix, which we're going to link an article that goes into what a skills matrix is, how to build it, and then how to utilize it. It's really, really cool. Lastly, I also uh we're also going to be including links from the articles that uh I used. Um, or no, I'm sorry, these are great articles to help you further uh your education on how to remove yourself from the owner-operator role into the CEO or owner role, and that is also going to be together with the links that I used to research the uh characters of today's story. So yeah, fun. We're covering all our basis. All of the bases we've with all of the bases chock full of information, so please hit the like buttons and the follow buttons and tell all of your friends about us. Our show is on all of your preferred platforms. We're on social media and YouTube, social media including TikTok. Uh, we'd love for you to also share our episodes. All of our links are going to be posted. And until next time, mind the business behind your business because all great successes start small. Bye bye.