How I run 26 Businesses AT THE SAME TIME

Shine Star

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00:00So fear not, my fellow children of the ADHD, we may make a billionaire out of you yet.

00:09Lots of people give me crap because I have a lot of businesses and they say,

00:12why, Cody, why don't you focus on one thing? And you know, it's probably not usually a great idea

00:18to argue against billionaires like Gary Keller, who proselytized focusing on one thing and wrote

00:23a literal book called The One Thing about, you know, focusing on, okay, I get it. But then again,

00:27while I love the book and have become buds with his co-author Jay, I disagree mightily. Here's why.

00:33I love doing one thing until I get good at it, but I only love it until then. And as soon as I hit

00:37competent and then highly competent, I'm in search of the newness. I don't know if you can relate,

00:41but that perpetual little itch for the unknown, the chasing the squirrel, we're actually wired for

00:47that. It makes us happy. It's how we get dopamine hits. It even turns out there's studies that show

00:52that newness is good for us. So I don't like this whole idea about the one thing. In fact,

00:57I like focusing on many things. But the problem with not doing that is you have to make sure that

01:02the one thing you're doing at the time actually works pretty well and keeps doing it even after

01:06you're not doing it anymore. Now, you don't have to believe me that diversifying is good for you.

01:12And then in fact, I think we all absolutely should be. Why don't you believe the billies? In 2014,

01:17there were 1,426 billionaires in the world. Out of those, about 960 of them are self-made. Out of the

01:24960, 830 of them made money from multiple businesses. In fact, one of my idols, Sam Zell,

01:33another billy, an infamous dealmaker said, I want to be chairman of everything and CEO of nothing.

01:39He wanted to be that elusive unicorn, jack of all trades, master of none. And it turns out he's not

01:43alone. Look at this. Branson, Cuban, Adelson, Musk, Bezos, Jobs, all followed their curiosity even to

01:51the moon. The question then becomes, how do you build an empire and manage it? The way that you

01:56do it is actually easier than I think most of us realize. And the best part about it is I didn't

02:00create it. I stole it from somebody else. My favorite type of R&D is really rip off and duplicate.

02:05So here's how to manage your zeros and where I got them from. There's sort of three different steps here.

02:11Decentralize management, rip off and duplicate, and don't drown in data. Now, the decentralized

02:16management with a small team, I learned from none other than Warren Buffett himself. Mr. Buffett

02:22manages Berkshire Hathaway's over 360,000 employees and still reads six newspapers a day. How? He uses

02:29Tom Murphy's. Do you guys know this guy? He was former head of Capital Cities, then ABC, then Disney,

02:35all bought them out. And his management principles of decentralization mean really this. Hiring the best

02:40possible people, letting them do the work and watching the costs. What does that mean exactly?

02:46Well, Tom said about Buffett perfectly. We are both proponents of a decentralized management philosophy

02:51of hiring key people carefully, of pushing decisions down the organization and of setting

02:57overall principles and resisting the temptation to be involved in the details. In other words,

03:02don't hire a dog and try to do the barking. So the key to managing multiple businesses is first

03:07putting the right people in charge of them, then letting them report to you high and tight on

03:11expenses. But more reports equal more problems. So keep it tight. In fact, Buffett runs his headquarters

03:17with a staff of 25 to manage billions in investments. Don't believe me? Check out this Christmas card from

03:24him. This is a Christmas card from last year. So how about this next one? Oh yeah, that's 20 years later.

03:30Did anybody on this Christmas card change? Side note, if you want to get a job at Berkshire Hathaway under

03:36Buffett, you probably need a new dream job since everybody on this photo is the same as the last

03:40photo. What does this mean for my businesses? It basically means that I want in-depth scorecards

03:44that are short and sweet at a high level and allow me to view the business with an eye towards

03:49profits and costs. That's it. I occasionally get drawn in, but I do all I can to back away.

03:54Your value as you grow is your brain and your distance to work on the business, not inside of the

03:59business. So the second thing is rip off and duplicate. Sometimes I think that's the best type of RMD.

04:04When I first started accumulating multiple businesses, I was overstressed, overworked,

04:08involved in everything, super close to burnout. And I was perpetually doing many things poorly,

04:14which means I was basically failing at everything. And one human is not very powerful. It turns out,

04:19a friend of mine, Clint Bruce, this guy, he's great. He's a former Navy SEAL and current badass

04:24business owner. And he said it perfectly. He said, for so long, I was an arrow trying to hit my target.

04:29And now I'm an archer trying to let fly my arrows in the right direction, but trusting them to find

04:35their own way. So I started to think about how do I become the archer, not the arrow? And that meant

04:39building the right teams. Easier said than done, but there are some lessons to learn here. In fact,

04:45I like to look at other people's models and steal their models. Disney Corp tells some secrets.

04:49Check out how they organize. They channelize into media networks, parks, merchandising, marketing,

04:54and entertainment. They share marketing and business lines, and they share marketing across

04:59all business lines, as well as merchandising. What's also interesting about them is, do you know

05:03what their top paid executive is besides the CEO? It's the chief strategy officer and the chief

05:08counsel. Why? Because strategy comes first and what comes second. Great deal making. The way that you

05:15should think about this for your business is your first hire shouldn't be an assistant. It should be a COO,

05:20CSO, or a chief of staff. My first hire is always my COO, who comes with a strategy for overall

05:25management. At First Trust, my last firm, it was April. At Contrary, I'm thinking it's sneaky. You

05:29need mental leverage, not simply operational leverage, aka administrative tasks. The goal is

05:34not a command down structure, but a command of teams or team of teams. This is where you are an

05:41interface, but you're not the funnel. This is what it looks like. This is actually how the Navy

05:44SEALs organize. And number third is don't drown in the data. Do not drown in the data. What gets measured

05:49gets managed, period. The problem most people fall into is they don't know what to manage. And so

05:53they manage too many things and they get too much data. I like the KIS method, the keep it stupid

05:59simple, which basically means I have a scorecard that do two things. One measures output and activity,

06:05aka what did your team achieve each week or what did you achieve and what, oh, that's a team member

06:10calling right now. They should know better. So there's the output and activity level. And then the

06:15second one is performance, aka what happened because of your activity. Did you bring in more

06:20profits? Did you bring in more expenses? They're very simple. A boring business's scorecard for a

06:26laundromat would be really simplistic. It'd be something like total cash collected, customer

06:30complaints issues, machines in working order, total costs. That's it. I want to look at that each week

06:36and I don't want to see anything else. Ask yourself, if I could only look at three to five numbers on

06:41each business, which ones would tell me the complete story? Then make them into a scorecard

06:45with a trend line so you can see growth or decay. Don't drown in the data. The numbers should leap

06:51out at you like a frog off the page. Anything less is worthless. To end, let your dogs do the bargain

06:57and question everything. Thanks guys.

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