First 5 Hires As You Grow Ep 377

In this informative session, Aksham Mozi of acquisition.com outlines the strategic hiring process for entrepreneurs looking to expand their businesses. Mozi emphasizes the importance of the first five hires, advising that they should be seen as extensions of the entrepreneur, performing time-consuming but low-value tasks. He suggests hiring in reverse order of the value provided and the cost to replace those skills in the marketplace, starting with administrative support, followed by customer service, sales, marketing assistance, and eventually, bookkeeping and IT support. Mozi also introduces the concept of 'entrepreneurial debt,' including life, management, financial, and technological debts, and the trade-offs between them. He advises entrepreneurs to be mindful of the types of debt they incur as they grow their business, with the ultimate goal of buying back their time for high-leverage activities.

• Aksham Mozi introduces the topic of company growth, focusing on customer acquisition, increasing customer value, and retention.
• He emphasizes the importance of the first five hires in a company, viewing them as extensions of oneself.
• The initial hires should focus on repetitive tasks that are time-consuming but less strategically valuable.

"Welcome to the game where we talk about how to get more customers, how to make more per customer and how to keep them longer, and the many failures and lessons we have learned along the way."

This quote sets the stage for the discussion on company growth and the importance of strategic hiring to achieve this goal.

"I'm going to walk you through the first five hires that you need to bring on in your company as you are growing and as a front little framework to think through this, you want to think about, especially for the first five, that they are really just helping you do more. And so think of them as extensions of yourself."

Aksham Mozi explains that the first five hires are crucial for expanding the founder's capacity to work and should be seen as personal extensions to handle less strategic tasks.

• Aksham Mozi introduces the concept of hiring in reverse order of task value and market rate for skills.
• Early hires should be in roles that are less expensive to fill and focus on necessary but low strategic value tasks.
• The goal is to replace the least costly skills first to maximize efficiency and allow the founder to focus on high-value activities.

"And so the first of these things, in terms of the order and sequence that you're going to be hiring them in, is going to be in the reverse order of the value that's being delivered and or what you can get in the marketplace in terms of dollars per hour."

This quote explains the strategy of hiring based on the economic value of the tasks and the cost of hiring for those tasks in the marketplace.

• The first hire is typically an administrative assistant to handle necessary but low-value tasks.
• This role includes various administrative duties that are essential for business operations but do not directly contribute to business growth.

"And so typically, one of the first two hires, and this can happen in any order, is going to be one person who's going to be more of an administrative help to you."

Aksham Mozi identifies the first or second hire as an administrative assistant, emphasizing the importance of this role in handling essential tasks that are not strategically valuable.

• The second hire often focuses on customer success or support.
• This role is designed to alleviate the founder from repetitive tasks related to customer service, such as handling returns or billing inquiries.
• The customer support person works closely with the administrative assistant, especially in the early stages of the business.

"The second hire will typically be somebody in the customer success or customer support role."

This quote highlights the second hiring priority, which is to bring on someone to manage customer-related tasks that the founder is currently handling.

• The third hire is usually the first salesperson, but this can vary depending on the founder's sales skills.
• If the founder is not strong in sales, this hire might occur earlier in the process.
• The sales representative takes over the sales responsibilities, allowing the founder to concentrate on other strategic areas of the business.

"The third piece will likely be the first salesperson."

Aksham Mozi points out the third key hire for a growing company, which is focused on acquiring new customers through sales efforts.

• Evaluate how much value you generate per hour and the cost to replace that dollar per hour.
• Prioritize replacing tasks that generate low dollars per hour and cost less to replace.
• Consider the net difference when replacing higher value tasks that can be outsourced for a medium amount of money.

"The corresponding framework that you need to be thinking this through is how much value am I making per dollar? Sorry, per hour. And then how much would it cost me to replace that dollar per hour?"

This quote underlines the importance of assessing the value of one's time and the financial implications of outsourcing tasks. The speaker is emphasizing the need for a strategic framework when considering which tasks to delegate or automate.

• Start by hiring administrative help to manage routine tasks.
• Next, get customer support help to maintain service quality.
• Sales roles are crucial; hiring depends on the business model and individual skills.
• Marketing or promotional assistance is often the fourth hire, especially for content generation.
• Roles like bookkeeping, legal, and tax support can initially be outsourced on a fractional basis.

"Right off the bat, you're going to have some sort of administrative help. Then you're going to have some sort of customer support help. Then you're going to probably hire some sort of sales role right from there."

Aksham Mozi suggests a sequence for hiring when starting a business, beginning with administrative support and followed by customer service and sales roles, highlighting the foundational importance of these positions.

"So, like, if, for example, you're a killer salesman, then you might have somebody who's prospecting and doing some of the intro calls for you so that the majority of your time is spent just closing, which is the higher value task."

The quote indicates that delegation should be aligned with one's strengths; a skilled salesman should focus on closing deals while outsourcing prospecting and initial calls.

• The process of entrepreneurship involves buying back your time to focus on high-leverage activities.
• Early-stage businesses can rely on fractional services for roles like bookkeeping, tax, and legal support.
• As the business grows, these roles may become in-house positions.

"It's always just buying back your time, right? So that you can level up the amount of time that you're spending on high leverage activities."

Aksham Mozi explains that the essence of entrepreneurship is to free up time for high-value tasks, suggesting that entrepreneurs should aim to outsource lower-level tasks to maximize their focus on activities that drive growth.

• Aksham Mozi mentions an unreleased chapter added to his book "100 million dollar offers" to build hype.
• The strategy behind releasing new content is to engage and excite the existing fan base.

"For those of you guys who are 100 million dollar offers fans, I love you. I added in a lost chapter that has never been released."

This quote showcases Aksham Mozi's direct engagement with his audience, offering them exclusive content as a way to maintain interest and promote his work.

• Aksham Mozi discusses the importance of understanding customer segmentation to increase profitability.
• Emphasizes the need for entrepreneurs to use their time effectively to continue adding value.
• Lack of value addition can lead to reduced profit margins.

"It talks about your first avatar and how to segment customers to make more money."

This quote outlines the content of the unreleased chapter which focuses on customer segmentation and its impact on revenue.

"I'll see entrepreneurs replace all of their time and then they don't do anything with that added time to add more value."

Aksham Mozi highlights a common mistake where entrepreneurs do not utilize their time to add value, affecting profits negatively.

• Describes the evolution of roles within a growing company.
• Highlights the potential for initial team members to ascend and manage their own teams.
• Mentions specific role progressions such as an administrative person becoming a director of operations and a salesperson becoming a sales director or manager.

"As you progress, each of these roles become more solidified. And these people, ideally in a perfect world, actually can ascend up and then have teams underneath of them."

This quote explains the ideal growth trajectory within a company where initial team members rise to higher positions and manage new teams.

"The salesperson might become a sales director or a sales manager who's actually leading and training a series of salespeople."

Aksham Mozi illustrates the career progression of a salesperson within an expanding business structure.

• Discusses the difficulty of transitioning from an individual contributor to a manager.
• Notes that recognizing talent for future needs is a skill that comes with entrepreneurial experience.
• Suggests that hiring talented individuals early on is beneficial but acknowledges the challenges due to budget constraints and the candidate's interest level.

"It's one of the hardest transitions in business, and it's commonly messed up by most people."

This quote emphasizes the challenge many face when moving from a role as an individual contributor to a managerial position.

"You recognize the people who have the talent to do the thing that is required later. So you can hire those people earlier on."

Aksham Mozi is advising on the importance of anticipating future role requirements and hiring accordingly when possible.

• Introduces the concept of incurring various types of debt when starting a business.
• Lists life debt, management debt, financial debt, and technological debt as examples.
• Stresses that neglect in any area will result in 'debt' that the company must 'pay back with interest' later.

"And so as a final concept that I want to introduce to you is that whenever you are starting a business, you are incurring debt, all right?"

Aksham Mozi introduces the concept of incurring different forms of debt beyond financial obligations when starting a business.

"If you don't have a good CRM that's in place, you will incur that debt, and then you'll have to pay it back with interest later when the company's bigger."

This quote explains how technological shortcomings, like inadequate CRM systems, can create 'technological debt' that becomes more costly to address as a company grows.

• Highlights the significance of having a solid technological foundation.
• Suggests that a tech hire is often necessary to manage critical systems like CRMs and websites.
• Mentions operational tasks such as password management and onboarding new employees.

"So that technological debt, which, by the way, is probably, if you had another next full time hire, it's usually a tech person who's helping you manage the CRM, build out sites, and kind of make all the things that you want to have happen or know should be happening in the background actually happen in the real world."

Aksham Mozi is emphasizing the importance of investing in technology and hiring a tech person to manage and implement essential systems and processes.

• Entrepreneurship often involves incurring different types of debt, not just financial.
• Types of debt include operational, talent, management, and CRM (Customer Relationship Management) debt.
• Entrepreneurs can choose what kind of debt to incur and in what order.
• Financial debt from investors or venture capital can be used to avoid other kinds of debt.
• This approach can help businesses grow more quickly and avoid common pitfalls.

And so the idea, in terms of moving quickly in the game of entrepreneurship is recognizing which debt I want to incur, in what order.

This quote emphasizes the strategic decision-making process in entrepreneurship regarding the types of debt to incur to facilitate rapid growth.

I used to poo poo the idea of investors and venture capital and things like that, who gave people money to start? Because I was like, that's not real entrepreneurship.

Aksham Mozi reflects on his initial skepticism about using investor funding in entrepreneurship, which he later reconsidered.

I just see it as just fundamentally an advantage is that they're choosing financial debt to incur fewer other debts, incur fewer operational debt, incur less talent debt management debt, CRM debt...

Mozi acknowledges the advantage of choosing financial debt to minimize other types of debt that can hinder a company's growth.

• Experienced entrepreneurs may grow companies faster by skipping early growth stages.
• Access to finances allows for implementing better systems and hiring more experienced teams.
• This can lead to skipping steps that would normally slow growth, such as upgrading systems or restructuring management.

And so it's the reason that each of the companies that we've had subsequently have grown bigger, faster, stronger than the companies that preceded them, because we are willing to incur less of the other types of debt rather than financial debt, because we have the finances right.

Mozi explains that having the right finances allows for less non-financial debt and contributes to the accelerated growth of subsequent companies.

• Framework one: Hire in reverse order of value provided and cost to replace.
• The initial core team should consist of customer support, administrative, sales, marketing, bookkeeping, and IT personnel.
• As the company grows, the teams in marketing, sales, and delivery expand.
• IT, finance, and HR departments grow at a different ratio, requiring fewer people per number of customers or employees.

And so as you scale, that is framework number one. And then framework number two is be mindful of the type of debt that you are incurring and make sure it is the type of debt that you would prefer to incur if you have the choice.

Mozi presents two key frameworks for scaling a business: hiring strategy and being selective about the type of debt to incur.

• Mozi concludes with an invitation to new viewers and reassures them that there's nothing being sold to them.
• The closing remarks introduce the channel, "Mozi Nation," and encourage enjoyment of the next video.

And so if you are new to the channel, welcome to Mozi Nation. I have nothing to sell you and enjoy the next video. Bye.

Mozi welcomes new viewers to his channel and sets a friendly, no-sales tone for the community.