Episode 215: How Ego Can Prevent Profit with Ryan Holiday

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I didn't at all.

Yeah, exactly. He's that good.

One hair.

He's that good. He's, he's a one haircutter. He charges by the hair. I don't know if this is the new thing in barbers. You know, barbers used to be like, oh, the haircut's 15 bucks or 20 bucks. He's like, it's a penny a hair. And he charged me like $700. He's like, dude, there's so much hair. Because what he does is he does one little clip and he does another clip a little closer and he counts that twice.

It's amazing that people still go to him.

It's shockingly.

You still go to him.

I know, I know. I can't stop. I can't stop my addiction. Here's my question for you. Yes, in all seriousness, do you have a vendor that you really like? I look forward to in my barber. Just for the discussion of ridiculousness, who is that person?

Well, I don't know if it's because you just said it, but it's my salon. And I was thinking about this just the other day because I moved, right? So I'm a little bit farther from the salon. But I literally, I've been going there for probably 10 years. Even when I moved to South Carolina, I still would get my hair cut anytime I came home to visit because I just love them.

You like them that much?

So much. And I was wondering like, what? What is it about them? And I think it is the people. And it's anytime you walk in, they know you. She'll make me a cup of tea. And then throughout the entire time, she's like, do you want more tea? Do you want more water? Do you want coffee? It's just this, like, feeling that you're among family.

Yeah, that's nice. And a good conversation.

Yeah, always. And it's weird because they always remember. And I'm like, do you take notes? How do you remember?

Oh, I may have a secret for you after we get started. What they do. Okay, get started.

Oh. Welcome, everybody, to the Profit first podcast.

Here we go. Yes. Oh, I grunt for the grunters who like the grunting.

Yes.

I meet them all over the country now. Kelsey, I, you know, I was just speaking down in. Where did I speak?

Miami.

Yeah, yeah, Miami. Yes, whatever.

Friday.

Friday. Spoke in Miami. Friday, two people flew down from Connecticut to see me speak.

Oh, that's awesome.

They didn't do it. Some people come up to me and go, I'm like, oh, I know we're inside. That's like the inside code for us profit firsters. Well, everyone, if you don't recognize my raspy voice, it's Mike Michalowicz. I'm the author of Profit first and Clockwork, a brand new book I have coming out or just came out. I don't know. It's kind of in the middle now. It feels like about business efficiency, plus some other books. And I am joined by my co host, Kelsey Ayers. Yeah, Kelsey Ayres.

Like a Z sound?

More than an S. It has a Z, but you guys stretch the Z. So it's Kelsey Ayres. Like that. And you are listening to us on the Profit first podcast. This is a show where we explore all elements of business profitability and efficiency and the other things that support profitability. And today's no different. We have a very special guest coming on Ryan Holiday. You know, his book Ego's the Enemy. You know, probably all his books. He's probably bestseller. He's got Trust me, I'm Lying was the first book I read of his. And oh, so much what we're gonna explore today, how ego can damage or maybe. Maybe there's ways it can support your profitability. How do you leverage that?

I'm excited.

We're talking about mindset so much in these episodes. Even last week with Brittany, just about the mindset she adopted so well, we're gonna dig into that. First we gotta take care of some important Business fun stuff. The first being what, Kelsey?

Well, you can find us on itunes. Stitcher, tunein Radio, Google Play, profitfirstpodcast.com any podcast or anywhere. And please subscribe so you don't miss any episodes.

And castbox, I heard.

Yeah, castbox, Castbox.

So, Kelsey, do we have any listener mail or any of that?

Sure. So this one actually comes from Robby Samuels, who was a guest, if you all recall. He says, I've been a big fan of the show for a while. What a fun show and always filled with great takeaways. I read profit first and implemented this year. I'm always keen to hear how others are applying these concepts and other creative ways they're putting profit first.

Robby, it's good to have you back, brother. Thank you for giving us that shout out.

And he left it on itunes.

Say, Robby, you are bringing the A game. Yeah, yeah, we love to get those itunes reviews. I wonder how we're performing. You know, life's podcast, they not a lot, but the smart people actually watch and monitor their activity and they're like, oh, guys, listening to what's the micro one I loved?

I forget the name of it. You always say it. These eight minute, like mystery ones.

Yeah. It was so well produced. It's my favorite. The way I heard it. I think it's called the way I heard it. Yeah, I think it's right. The way I heard it. It's so well produced. Next time you're throwing down flooring or whatever you do at your house, be listening to his show. It will blow your mind because then we can have some confab about, like, what you hear. But he's like, oh yeah, we're ranked number one. Like, he knows their rankings.

Yeah.

Like, I don't know. Are we ranked? We're probably not even ranked.

I. I find it's really hard to find rankings.

I think it's easy to avoid rankings. I think that's what we're doing. Like, I don't think we want to see our rankings.

I mean, we're not doing it for rankings.

So that's Touche. That's good. That's a good point. Yeah. Everyone else that says their rankings clearly are doing for one reason, rankings. I want to thank our corporate partners before we kick off this show. Right networks. Did I forget to do the read in the beginning again?

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And they can get 10% off. They mentioned profit first.

Yeah. But you have to know how to get there. And here's how you do it. You know most, most companies are like I'll go to our website rightnetworks.com youm can go there. But here, here's what they discovered. If you don't have your applications on the web, you probably don't know how to go to a website. Like we really gotta go back old school. So you can send a courier pigeon with the code Profit first or you can call 888-469-5905 to get the pony express and then have them send over. No, call 888-469-5905. That was eight, eight eight.

It's a good thing we don't insult our sponsors.

I know, I know, I know. 888-469-5905. And right now we're sitting there, they have agents on the line right now. And if you say profit first, don't by the way and just say that first. Like when they go hello, you're like profit first, 10% off. I think if you say it later, I don't know, maybe it makes no difference.

Yeah, it's only 8% off.

There's gotta be a certain point where you can't say profit first anymore. Like you call em like yeah, like the buy they get the credit card, they hang up and then there's a disconnect. You hear the tone boo. And you're like profit first.

It's too late.

That's too late. So I think the earlier the better. All right, Kelsey, is there anything else? Oh, just we did a shout out. We got our sponsors. Oh one last thing is we are going to recap what we learned today from Ryan Holiday. We also want to know what you learned. So get your ear close to that headset of yours and. Yeah, or the microphone. Kelsey has stuck her ear on the microphone and get ready to listen. Ryan Holiday is the best selling author of Trust Me I'm Lying. The obstacle is the way ego is the enemy and other Books about marketing, culture and the human condition. His company Brasscheck has advised companies such as Google Taser. You know you have a ta. Don't you have a taser?

Do you?

Oh good. That's good and complex. As well as a Grammy award winning musician, musicians and some of the biggest authors in the world, is my privilege to introduce Ryan Holiday. Ryan, welcome to our show.

Welcome, Ryan.

Yeah, thanks for having me.

So there's our cheesy applause there. So let's get right into it. Ego is the enemy. But don't we all have ego? Isn't it hardwired into us? Isn't that the definition of humanity?

I'm not, I'm not sure we've ever, I don't know if you've ever been in a situation and you're like, you know what this room needs? It needs more ego. Let's pull some more ego. I think what, what, what you're referring to is confidence, right? Confidence is important. You have to believe in yourself. You have to think you can do things. But I sort of define ego as this extra thing, this sort of toxic emotion, this sort of selfishness and greed that sort of creeps in, particularly when we're successful. And I think, you know, every religion, every philosophy all sort of warns against that force. And so the book is really about how do we check those egos and keep them from, from getting in the way of what we're trying to do.

It is wired into. It was interesting. You just triggered something. You said it actually grows as maybe our financial success grows. Why is that?

Well, oftentimes we chase success because we feel some insecurity or insufficiency in ourself. And so how many people are motivated by wanting to prove someone wrong or wanting, proving people who didn't believe in them to be mistaken? And then what can happen is as we get that success, we find that it wasn't enough. And then we're still angry and we're still upset and we still have that sort of little child inside of us that doesn't feel good. And it's in that phase that the ego is really dangerous. Because now look, if you're egotistical and you're 17 years old, there's not a lot for that ego to damage, right? Unless you're like some star athlete or, or star student, you don't really have anything to lose. But let's say you've built this business from nothing and it's now got seven figures a year in revenue and you now think that that makes you better than other people, that it makes you really special, that you're a genius. Well, this is where ego is really insidious because you're going to make mistakes, you're going to alienate people, you're not going to listen to feedback. And now you really do have something to lose. And you have lots of people that are counting on you, whether that's your family or your employees or your investors.

So you just said, we don't listen to people as our ego grows. And I think, or I should ask, is that fed by our early success, that we think we have the solution and the answer, and that we shouldn't be listening to other people.

Well, one of the dangers of this sort of paradox that is entrepreneurship, or being a writer or an artist or whatever it is, you go and you make something. There were all these people who said, don't do that. It's not going to work. You're going to fail. Right? There's all the people that doubted you and you didn't listen to them. Right. And you shouldn't have listened to them. But the problem is, okay, now, you know, you're the CEO of a company with 500 employees and you have this idea, this sort of crazy, bold idea. And you know, your CEO comes to you and says, hey, don't do this. It's not going to work. We don't have the money for it. Or they point out these, these, you know, flu flaws in your plan. If, if all you hear when they tell you that is another person doubting you, another hater who doesn't believe, you're going to override those objections and end up sort of plunging ahead with a, with a plan that's, that's half baked. So part of, I think the thing that ego makes difficult is separating out criticism and, and haters or, or real feedback and just sort of people who don't see what you're doing. And so the reason we want to strip ego out of the equation is that if that COO comes to you and says, this is why your plan's not going to work, can you hear that? And go, okay, you're wrong for the following well thought out reasons. That's very different than saying you're wrong, you don't believe in me, and sort of projecting onto them like, you know, what your parents always thought or something.

So that fabled story, Roy Disney goes to 1,000 different bankers. Rejected, rejected on his thousandth and month try, he finally gets funding and here comes Disneyland. Is that ego that kept him going or is that Confidence. And how would you distinguish it in a case like that?

Well, what I think you want to do. So ego is like, I'm a genius. No one understands me. I'm brilliant, blah, blah, blah. What, What I think you want, what I think a healthier attitude for an entrepreneur is, look, none of these people want to back my thing, but that's because they don't know what I know about this thing. Right? Like, if you're. There's. There's this line. I'm forgetting what famous scientists said it. But he's like, look, if you have a truly innovative idea, you don't have to worry about people stealing it. You're going to have to ram it down their throats. So there's a, you know, there's a difference between thinking you're God's gift to humanity and that everything you. You come up with is brilliant and being able to go, look, none of these, you know, VCs, or none of these investors or none of these banks want to get on board. And that's because they don't understand what I'm doing for the following reasons. So now I need to take that as feedback, and I need to improve my pitch or my selling point to anticipate and adjust for those objections and move forward, like with my books. And we have the same publisher, so you've probably experienced this as well. You go, you get notes back on your book, and there are going to be some notes that are totally correct and other notes that are. They're not incorrect. It's just that the editor didn't understand what you were trying to do with that paragraph. So what you have to do is go, okay, I'm going to leave this here. But he or she is not wrong in not liking this. And I need to understand why they didn't like it. And I need to anticipate that and prove what I'm doing so that I can do what I'm trying to do and make sure that I'm not, you know, alienating anyone or making a mistake or on and on.

Kelsey, what Ryan says, so true. It is actually tough reading the editorial of your own book because it feels like a criticism at times, but that's the ego speaking. And it's right. They are right, but they're also wrong. Contextually.

Yeah. The great line is, when someone tells you something's wrong, they're always right. And when they tell you how to fix it, they're always wrong.

Interesting. In my own manuscript, one of the editors came back from Penguin and said, there's like a line says laugh out loud because I try to make my little jokes throughout the book. And she doesn't LOL to one of the lines like that wasn't a joke, that wasn't funny, that wasn't supposed to be funny. So let's, let's apply this to some other kind of business scenarios. So we talked about authors, but what about a salesperson? You know, the salesperson, every business that I've run into says I want to hire that rainmaker. They got to be all about the money closing abc, you know, always be closing. That sounds like the epitome of ego. What about hiring people like that? Is there a time it's needed?

There may be, but I guess what I would rather, I would rather have a salesperson who actually believes in my product, who's a good person and can move product, right? Like the problem with, let's say a salesperson who's deeply egotistical, you know, perhaps a bit manipulative. They could sell, you know, ice to an Eskimo. The problem is they may be going around to selling your product to people who don't actually need it or people who aren't going to be happy with it. And they're doing this because, you know, they're paid on commission, this is beneficial to them. But then that's causing backend problems for you, which is that you're now getting customer service complaints from these said these same people or you're having to do extra account maintenance for these clients because they're not the perfect fit for you. And so I think what I'm always thinking about is, is what am I actually trying to accomplish with this project and is purely financial motivation or sort of bringing in that so called rainmaker actually going to get me there. And I mean, I think what's so interesting about the work that you do is that people, and I think this goes to ego, people wrongly mistake the goal of their business as to make as much revenue as possible, which to me that's ego, right? To be able to go like, oh, I have a company that, you know, did 100 million in sales last year. But sure, how much money did you actually make there? There might be businesses that had $1.1 million in sales last year that actually made significantly more profit than you. And so, so what I think what we're trying to do, why I think you strip ego out of the equation, is that it allows you to see things for what they really are. So the, the point of a business is to obviously make a Profit. That's why we put our time into it. But it's also to do something that you believe in. So there might be things that I could do with my books that might sell more copies in the short term, but would make me more unhappy in the long term because I would be writing things that I don't believe in or that I don't like, or that it's getting me an audience that I'm not that interested in speaking to. And so I think what we're trying to do is go to the core, the essence of things. And often ego is an impediment to doing that.

It's clear that ego can negatively affect us. But I want to try to categorize as best as possible. We've been dancing around a little bit, but let's talk about specifics. If I own a business and I let ego run my business, how does that harm profitability?

One of the stories I tell in the book is the story of John DeLorean, who was a brilliant engineer and a brilliant creative visionary. He basically had the playbook for Tesla, you know, many decades before Elon Musk had even started PayPal. And the problem with, with John Delorean when he starts DeLorean Motor Company is that he has no real discipline for running a business. He has a terrible management style. He's obsessed with the marketing, with selling as many cars as possible. But he has no real plan to actually fulfill these orders to, to actually make a high quality car. He just sort of assumes these things are magically going to get taken care of. And of course they're not taken care of. When the car launches, it's a disaster. He owes all this money to creditors. He has government loans that are looking at being foreclosed on. It's just disastrous. And even in that moment, instead of going, look, I have to get serious about this. I have to figure out how to streamline this. I have to, to. To cut waste from the business. I have to stop pursuing all these ridiculous side projects. I have to stop, you know, doing all this sort of ego gratifying press and publicity and just, you know, actually run a car company. You know, he ends up, you know, trying to secure bridge financing through a cocaine deal, which ends up, you know, not. Not ending.

I try that once myself. Not a good move.

No, no. And so, so I think business as we see it, like in movies and in the press, seems often sexy and fun and glamorous, and it can be. But there's also just this sort of, these sort of operational Nuts and bolts that you have to get right. And I'll give you another example. I have a business off one of my books. We created this community called Daily Stoic, and we sell all these great products that we develop and source all over the US It'd be really sexy and fun to just spend all my time writing articles and marketing and trying to get as many people to buy them as possible. But that's not what's going to be profitable and efficient. Where the money is in streamlining my supply chain and in the logistics and in making sure that the customers who have bought from us actually have a good experience. So, you know, you think you're. It's going to be all advertisements and interviews and really it's, you know, distribution centers and customer service requests and, you know, getting better deals on shipping and handling and packaging. And an egotistical person is not going to want to do that work. They just want to do the sort of the stuff that's. That's fun and exciting.

You referenced John DeLorean and you referenced Tesla when you were talking about John DeLorean. He kind of had it specked out before Tesla came upon itself. But is Elon Musk, is he potentially being driven by ego? The story's still out in Tesla, but what's your perception? Is there similarities or differences between him and the DeLorean story?

There very well may be some similarities there. Running one company is hard enough, and Elon Musk has his hands in all these other companies, and then he's on Twitter all the time, and he comes up with these, you know, he just launched like a flamethrower last week or whatever.

I heard it.

It's. It seems awesome and cool, but if I was a major shareholder in Tesla, I would be, you know, pushing for discipline and focus and sort of a single, you know, obsession of vision on this one thing. And so, you know, who knows, maybe he can pull it off. But if he doesn't, you know, and he doesn't have that much Runway, if he doesn't, people are going to be pointing to the fact that, hey, maybe it's not a good idea to be doing all these things at the same time. It can work for a short time, but in the long run, eventually it's unsustainable.

I read an article about Tesla and this kind of incestuous situation happening with vendors embedded within vendors. Basically, to get a project on Kelsey, Instead of spending $100 on it, a vendor would hire another vendor who hired another vendor to get the project done. And now cost $300 to do the same thing. So this kind of incestuous vendor relationship. And Elon Musk was outraged when he found out about this and said, we're going to remove this. But I wonder, to Ryan's point, if he was obsessed with his own company, I wonder if that would have been avoided from the get go. You know, I don't know. All right, so now we know the problems that ego can bring about. How do we get our own ego in check? Kelsey's got a big ego. What do we do?

One thing. What I think the dynamic that you just sort of joked about is like, if you have people near you who you trust, who care about the same, that you guys have an alignment on what you're trying to accomplish together, that's a natural check on ego. I think one of the problems that happens for entrepreneurs and business people is they slowly get rid of anyone who makes their life slightly harder, who challenges them, who questions them. You know, they buy out earlier co founders and they. They dilute investors and they stack the board in their favor and so on and so forth. And then they plunge into these boondoggles or these difficult problems because, you know, no one can call them out on it. And so I think one very practical, easy thing to do is make sure you cultivate people who will call you out when you need to be called out.

I love it, but as a boss, so I trust Kelsey emphatically. I call her my right hand, my right brain. Like. Like, you know, so much. I trust Kelsey emphatically, but I'm still the boss, right? So if Kelsey doesn't does something to my dissatisfaction, I have the leverage to say, I'm sorry, but I'm not gonna pay as much or you're fired. She's putting a finger gun to her head. Like, that's a real risk for her. How can I empower her? That shows she's protected and can really call me out when I'm doing something that's ego driven.

No, that. That is. That is the very difficult circumstances that. And I found this in my own career with, you know, CEOs, you often find it's. It's. It's not as if the company doesn't. There isn't the knowledge inside the company of what changes need to be made or what, you know, pivot they need to do or what the. What the problems are. The knowledge is there. It's that it's not getting up to the CEO or to the executives because they've created an environment where that Kind of feedback gets you in trouble. I often say that, you know, we can cultivate this environment where we. Where only a kamikaze mission is going to successfully tell us what we need to hear. And that's extremely dangerous. You don't want anyone to have to go, I'm going to walk in there and I'm going to tell him or her what I think, and I'm probably going to get fired for it. Because most people are not going to have the strength of character or the dedication to do it. And they don't. Unless they're somehow a major stakeholder in the company. You're not going to get that feedback because they'd rather like, at the end of the day, it costs you more than it's going to cost them if you don't listen to reason. So obviously, creating aligned incentives is a big part of that. With my marketing company and with the businesses that I've started, I prefer a model where I have partners. We're not all equal partners. I own the majority of it because it was my idea and I put in the most work. But I don't want these people to be afraid of being fired. I want them to be aligned with me where if I'm successful, they're going to be successful. And so I think incentives are a big part of that. And you can also see, as we're talking about with the sales example, you can also set up incentives that encourage ego, where maybe people won't want to tell you something because they're killing it, racking up certain fees. They, the vendors obviously wouldn't want to tell Elon Musk, hey, this process is terribly inefficient because, you know, as long as the invoices are being paid, they don't care. And so you want to create aligned incentives that, that create a culture of, I think, you know, mutual respect and, you know, shared success. Not incentives that, you know, one up, one down kind of incentives where, where I'm working against the company's interest because it's good for me.

Is there kind of some self monitoring I can do?

Yeah, yeah, of course. Look, I think journaling is very important. You know, why don't you sit down every morning and do some writing and sort of get some of those toxic thoughts or insecurities out of your head and onto the page. And oftentimes you see just how silly some of them are. I think that's, that's certainly something that's been successful for me. I think one thing that leaders need to do, or just ordinary People is why don't you make sure that you're doing things that are humbling you? Right? So if you have gotten so good at what you do, whether it's running your business or hosting a podcast or being an actor or running your lemonade stand, whatever it is, the longer you do it, the more naturally it comes to you and the more those feelings of sort of superiority and ego can creep in. But if on the side, you're also pursuing, you know, learning a foreign language or you're constantly trying to improve or focus on where you can get better, that's going to also function as a natural check against ego. You know, again, if you're only doing what you're really good at, you're going to feel really good all the time. If you focus on where you can get better, not only are you going to get better, but. But you're not going to be sort of, you know, sitting in this, you know, this bubble of your own awesomeness.

The visual is great. I saw bubble boy and just the word awesome all over. What about the reverse? So say one of my colleagues here has a challenge with their ego, but maybe they're in a position that's subservient to my role at the company. How can I approach that?

Well, I think one of the things that you find with ego is that rarely is. It rarely does attacking it head on do anything. Right. Not to get political. When you take someone like Donald Trump, clearly there's an ego there. If you went up to him and you said, you're an idiot, you don't know what you're doing, you're an egotistical monster, he's not gonna go, oh, you know what? You're totally right. I'm gonna change everything.

That never happens.

Right. And so I tend to find that ego is sort of something you attack from the side you try to give. You try to get them there on their own. Right. You know, the joke about ego is the way you get an egotistical person to do something is to make them think it was their idea all along. And I think that's partly even with seeing their own ego. Right. You know, sort of get it. Getting them some perspective on what they're doing, that doesn't feel like an attack, that doesn't feel like an indictment of them as a person is going to help them move to where they need to get. Although ultimately as the boss, that in particularly bad situations you may have to go, look, I really like you as a person, but this has gotten out of control. And It's a bad influence on the rest of the company and we're going to have to let you go. You know, like, I think one of the jobs of a leader of a company is to make sure that egos are not allowed to spread like cancers throughout the organization. Because if I'm a mid level employee and I see my boss acting like a jerk, I might turn around and act like a jerk to the people beneath me. And it can spread very quickly.

And have you found that companies that can rid themselves of ego or at least contain and control it? Does that affect the bottom line?

Well, ultimately, yes, because I think what we're getting closer to is objectivity and self awareness, the ability. Look, how can a business or a person who's obsessed with themselves properly serve another person? Which is what business is all about, right? An artist is making art for an audience. If they're obsessed with their own, you know, feelings to such an absurd degree that they can't relate to their audience, the art's going to fall flat. If you're, if your business is so obsessed with, you know, eking out every possible penny from someone, you're not going to understand or see how you're alienating your, you know, your fans and your supporters one by one. If a politician thinks that this is about them, they're going to do a very bad job representing their constituents. So across the board, I think ego gets in the way of what we're trying to do, which is provide value for other people and then be compensated for that value.

I'm curious. On your personal reflection, I've noticed, Ryan, every book that I write, ultimately I'm correcting my own difficulties and it comes very apparent and I plan to write a lot of books. I have a lot of issues. But did you, when you were writing Ego is the Enemy, did it reveal anything about yourself to you?

Of course. Of course. Look, I didn't write this book because I'm this Zen monk who sits above everyone on a carpet or something. I'm, I'm, I struggle with ego as much as everyone else. I've done things, I've said things, I've made mistakes that were clearly motivated by ego. And I've seen how they've cost me. I've also had the benefit though, and I imagine you have with all the businesses that you've worked with, you've seen people who did it like 10 or 100 times x worse than you. And so what, you know, you can go, hey, look, I see how I do this thing out of ego and then also over here, I see how that a similar brand or similar thread of ego cost this business a billion dollars. One of my favorite books is this book called Billion Dollar Lessons. And it's all about massive failures. So much of business books are all about people succeeding and it's never about people failing. And this is all about these billion dollar failures. And at the core of every one of those billion dollar failures is basically someone thinking the rules didn't apply, that the math was different in their case, you know, that they had the Midas touch, you know, some form of ego did that. And so I, I've seen it in myself, certainly. And then what I've tried to do with my studies and what I've tried to do writing this book is go, okay, how can I make sure I don't spin off the planet like all these other people like that? I want to make, you know, I want to make a thousand dollar mistake, not $100,000 mistake, and then I want to learn how to $100,000 lesson from that thousand dollar mistake. And that's where the battle against ego can be so valuable.

Ryan, these have been fascinating insights. Before we let you go, where can our listeners find out more about you?

Yeah, you can go to my website, which is ryanholiday.net the books are everywhere, Books are sold. And then, yeah, I guess that I'm Ryan Holiday on pretty much every platform.

That's wonderful. And I don't typically suggest this. I suggest that readers pick one book that addresses their current issue. This is one of the rare circumstances I'm saying just buy his whole compendium of books. Trust me, I'm lying. The obstacle is the way ego's the enemy, et cetera, et cetera. Just go to Amazon and type in Ryan Holiday. And when you see those 15 books come up, buy 15 books like it. Is that worth it? My first discovery, Ryan, of your work was Trust me, I'm lying.

You're too kind.

But my first discovery, your book was Trust me, I'm lying. And it was just such a obvious but simple new approach for me to go after the small media and build my way up to build that momentum. It's had a magnificent impact on me and I believe in your work that much. So thank you so much for joining us today.

Thank you.

Thanks, Ryan.

All right, my guest.

Appreciate it.

That was. I kind of got the goosebumps. That was cool. That was cool. The topic was interesting. He is very cerebral and his content is just amazing. I also got this message from him saying Ryan, you don't know. Kelsey, if you know this, every call I get in, I record. And I called Ryan about a month ago. I said, I don't know if you'd be interested in coming on the show. And I said, would you want to come on the show? And here's his response.

Do it. Just do it.

Yeah, that doesn't make sense. I don't know. Well, I mean, like, do you want me to, like, how do we get you on? And then I said, I'm a little concerned about the technical stuff. Do it. Just do it. Yeah, he got a little jacked up. Okay, that was stupid. I tried to be funny. Kelsey. So, Kelsey, here's what we're going to do first. Give me a punch, would you? There we go. We're going to thank our corporate partners. Then we're going to recap what we learned from Ryan. I got tons of notes and I think we have a listener question mail today.

We do indeed.

Okay, first let me thank our corporate partners. I already read Right Networks to you. The question is, we're still in the show, Kels, and our listeners have not called Right Networks yet. So give them a call. The number's real simple. 888-469-5905. You call that number, you start yelling profit first as loud as you can in the phone until they're so frustrated they give you the 10% off, right?

No, just say it once.

Oh, just say it once.

We want a good relationship with them.

Oh, yeah. Could you imagine? Profit first, profit first. We'll never get sponsored again. Then once you're on the phone with Right Networks, you're probably gonna realize, oh, my phone sucks. Yeah. God, so echoey. The connection's marginal. I have to actually sit in a static spot, you know? Or maybe on your cell phone, you're like, you got to hope you're not pinging the wrong cell tower and being tracked by the government. So if you have your nextiva phone, you have the flexibility and they can't track you. It's great for anyone that's committed something less than appropriate. So nextiva is a voiceover IP phone system. You can use it for your nefarious activities or your legitimate ones. And it's the best phone system, I think, of all time. We've been using the nextiva phone voiceover mail system since we've started this business. But I've been using it for, I think, six years prior. I think I'm on my 10 year anniversary with them. And it's only gotten better. The Quality service. You know, as these companies get bigger, I'm not picking on names, but these large companies, like my Internet and phone. Sorry, my Internet and TV at home. The bigger they get, the service gets worse. Yeah, Nextever. The bigger gets, the service gets better. Maybe they got. Maybe they have something they can teach these other companies. And last, but certainly not least is Receipt Bank. I use it all the time. You don't have it enabled on your phone, do you?

I don't.

We should get it for you. You don't have that many receipts, actually. You know, it's like Parkinson's law. If I gave you Receipt bank, you start scanning stuff in. Mike, we did new flooring for the office.

The office at my house.

At my house. So Receipt bank is a scanner for your receipts. It syncs it up with your QuickBooks or Sage or whatever platform you're using. But you no longer have to carry around that shoebox. You're legally required to have it, right? I mean, if you ever get audited, God forbid, you have to produce your receipts. It tracks all that for you, reconciles for you, makes it so efficient. All right, Kels, what'd you learn? Let me have to let you learn. We haven't heard in a while. So what'd you learn today? I heard from Christina recently.

Oh, that's great.

She. I will not get what she's got going on, but she's got fun stuff going on. I think she's awesome. She took time to do things that she wanted to do with her boyfriend and stuff. And it just sounds like things are humming along. So I just want. You know, I'm thinking of her, and it's good to hear her voice on that song. Okay, what'd you learn today?

Well, I love this. I love talking about kind of psyche stuff. I think my biggest takeaway was, you can't serve anybody when you're obsessed with yourself. And ultimately, as business owners, that's what we're on the earth to do, to serve people. It's not about ourselves ever. And I have to say, working with you, it was one of the first things that I took away from you when you were so gracious. You're always so gracious about mistakes. Like, if ever I mess up something, I feel like you're very objective about it, but always almost nurturing, you know? And I remember having a conversation with one of my girlfriends and just saying, I feel like he has such a good, healthy ego relationship where he's confident.

Thank you.

But it's not in an egotistical way. It's not. He. It's never about his ego. It's always about serving entrepreneurs in a bigger community. It's never about you.

Wow. Thank you.

Yeah, but I mean, it was literally probably within my first few weeks.

Yeah. I really like our working relationship. And like, listen, we throw zingers at each other all the time. It. But it's fun and it's. It's a supportive, loving kind of relationship. And I think we're both on the bigger corporate mission. Like, yeah, we have different flavors of it. Like, I want to eradicate entrepreneurial poverty. I think you're on a mission to eradicate lack for people and, you know, different ways.

Want ease for people. I want joy, fulfillment, ease for people. And I think that.

Yeah. But I think collectively we're fulfilling that. And by teaming up, it's a much greater impact than if either of us want to buy it solo or for it solo.

Yeah, exactly.

My takeaway was two things. First of all, we chase success because of lack of. I can relate to that. And I can also see it. So my own progress in my business, the size of my business, they were all ego related. Right. The finances, all those components. I was never, I was never big enough like the business. The biggest business I ever had was 35 employees, which for me was a big deal because when I had two employees to go to 35, it's like, wow, I've arrived. But every step in that growth trajectory, there was someone that's much bigger. And I'm like, oh, I'm not here. And it was, it became frustrating. Same thing with financials. Right. I was never had enough revenue coming in. I was never taking home enough money. Then I had my financial heart attack. I destroyed myself. And. And now I'm like, wow, the right size business can find me. Like, I, I literally when someone says they have a hundred employees or a million dollars in revenue or 10 million, I'm like, I. No feeling toward it.

Right, Right.

No feeling.

Is that good or bad for you? I don't know.

I don't know. The only thing I wonder is. Yeah, how are they doing with that?

Yeah.

I don't necessarily aspire for $100 million business, but I also feel if that this is what this business turns into and it has the potential that only if it's of service. Right. I think that's, that's what matters. Like, I want the right size business to fall upon itself because it's of service at the right size at certain points shouldn't be bigger.

Right.

I was hanging out Dave Ramsey. That was like three weeks ago. Now I'm with Dave Ramsey and I didn't get much time to talk with him. I was one of the million gawkers. Seth Godin was like crawling over me to get to Dave Ramsey. Elbows me in the eye. Ryan Deiss was there. He groin kicks me. And Dave Ramsey says something. Someone asked him about his wealth. I don't know what his personal wealth is, but I know his business is around half a billion dollars debt free company. And he owns the biggest house in Nashville. It looks like a hotel. And someone said, how do you feel about all this wealth? And he goes, I want to be very clear. This is not my wealth. He is, he's Christian. He says this is. This is God's money. I am just of service to the money. I am a steward for this money. Say this is my stewardship and I take responsibility, but this is not mine. It's passing through me. And I think you can see that from not just a religious standpoint, but I think that is a lack of ego. Here's a guy who's extraordinarily financially wealthy and extremely confident. But not egotistical.

Yeah, exactly. And I feel like it's, you know, your take on net worth too. It's not. We can't gain our own self worth by worth, you know, we can't associate what we're worth based on money ever.

Exactly.

Or fame or whatever that you know.

Well, fame maybe, but so. I'm kidding, Kelsey. So we want to know what you learned today about ego. You can put that in itunes and comment and put it on our Facebook page or anywhere. But we want to know what you learned about ego. Okay, Klaus, do we have a listener mail today?

We do.

Hold on. I got hit the funny joke. We've got mail pattern baldness.

It's funnier every time.

It's so bad. So bad. At a certain point it will become funny because it's so bad.

So this one comes from Russ Perry. He says, hey, Mike, I just finished reading Profit first and it's changed the way I look at my business completely. I have one question though. We own a painting company who runs subcontractors to complete the work. And their percent share of the job is different for every project. Should I implement my caps once they are paid to simplify the process?

Yeah. So first of all, Russ, kudos to you for using the correct acronym caps, which stands for current allocation percentage. It gets confused often with taps, which is target allocation percentage. That's numbers that we did some research and we identified what the fiscally elite businesses in the world are doing and. And what we think you may want to target. But you could do more or maybe less, whatever is the right caps for your business. So kudos there. In regards to subcontractors, here's a simple rule, Russ. If Your subcontractors represent 25% or more of your income, so just for round numbers sake, let's say your business does $100,000 in revenue. If the subcontractors charge you $20,000 annually, that's not considered a subcontractor expense outside of operating expenses. You put that in opex. But say your subcontractors charge you $50,000 cumulatively per year. That's more than 25% of the 100,000. So we're going to take it out. We do what's called a real revenue adjustment. So we take your income, we subtract out the subcontractors of 50,000, which leaves 50,000. We then run profit first off of that remaining 50,000. Because basically, Russ, you're hiring. I'm sorry? You're collecting money from your clients and hiring these contractors that have their own independent businesses and giving it to them. So where you do this before or after depends on the percentage. If they're more than 25% of your total revenue, that money comes out and goes to them. Set up a special account called contractors, put the money in there, and then the remainder is what you treat as income and run through profit first. If they're less than 25% of your total income, then just put them to OPEX and pay them out of there. All right. I hope that makes sense. Did that land with you, Kelsey? Okay. Okay. Atlanta with Kelsey Daddy. Okay. Do we have anything else to do, Kels?

No.

Oh, then let's get the great music. Oh, there it is.

Wait, is that a guitar?

Yeah, funny. Yeah, funny. He has a guitar. You know what I'm gonna do one day?

What?

You're gonna be sitting there. You're housed. You think you're gonna hear a fox screaming outside? It's gonna be me playing guitar.

I will call the cops.

Then not only me will be me. I will be riding on that horse. I'll be riding that horse like, oh, it's only a guy riding a horse playing guitar. All right, take us out, C. Everybody.

Don't forget to leave us a comment or ratings on itunes. Stitcher, Tunein radio, Google play and profit.

First, podcaster.com and cast box if you can. Right?

Yes.

Can you leave comments on there do you know?

I don't know.

Oh, okay. If you can leave one there.

Yeah. Or you can email me. And if you have a Profit first story, don't forget to email me.

Yeah, yeah. We want to know about your profit first success or struggles or challenges. We're going to coach you through it and we're bringing on more and more guests and we're bringing on extraordinary experts like Ryan Holiday. I mean, God, what a show. What a great show. Oh, one more great thing you can do is go to Profit first professionals dot com. This is the organization that we started now four years ago specifically to help drive profit and business. Businesses that need desire, want more profitability. It's the lifeblood of your business. You need to be profitable. So how do you do that? Well, why not have a professional who's certified in the methodology, who has implemented their own business, who's done it for countless others? Why don't them do it for you and guide you the right way? Kind of like a trainer at a gym. If you sign up for a gym and start working out, you can, but you may injure yourself if you've never worked out before. You may not stick with it too long because it's too abrupt of a change. These trainers make sure you stick with it. Make sure you do it right and profitable. That's what Profit First Professional is. So the action is this. Go to profitfirstprofessionals.com then click on Find One and then fill out the application and you're set up and rock and roll. It's that easy. All right, get your button gear and do it. All right, let's get out of here.

Bye, everybody. Thank you.

Bazinga.

Sam.