The Value of Pushing Work Down with Jon Matzner

Hiring somebody globally is like me selling you a dumbbell and then saying, go get in shape. You need a dumbbell to get in shape. But I also want to talk about your nutrition. I want to talk about how not to get hurt. I want to talk about if you should be using a barbell instead of a dumbbell. Somebody sold you a dumbbell and now you're like, I'm still fat. And then you actually get the support in an ecosystem and you go, oh, I'm doing the equivalent of eating a gallon of ice cream a day. Doesn't matter how good I am with the dumbbell. Oh, you mean you don't have a written down place where they can know what a good job looks like? No wonder you're still fat. And so that was part of what we created through this iteration process was why don't more people hire globally? Oh, because people are just selling them dumbbells and then saying get in shape.

Welcome back to Peter Lohmann's podcast. I'm so excited today to be sitting down with John Matzner, the one and only John. For those who aren't familiar, I'd love if you wouldn't mind giving like a 90-second background just so folks are a little bit familiar with who you are, what you've been up to, and then we're going to get into it.

Thank you for having me. I'm John Matzner. Started my career in working for the government. I was in the Foreign Service. So lived and worked abroad. They taught me Arabic, spent most of my career in North Africa and the Middle East, started buying small and difficult to run businesses with varied success. I'll say some much more successful than others. Was able to develop a skill set that I've now been able to leverage into different businesses and different business models. And currently I spend about 90% of my time on a— I think of it as a subscription with a community around helping American companies hire globally. And we're having a lot of success with that. That's been growing really fast. So that's, that's kind of my background.

Awesome. And we're definitely going to get into that because that's of high interest to my audience, I know. And your approach to working with global talent or RTMs, as we call them in the property management space, is actually a lot different. It's totally unique as far as I know, or at least it was till you started getting some copycats recently. But before we dive into that, I want to talk about working with employees and talent, whether that's globally or domestically. I think you have a really interesting philosophy around this. I'm pretty sure I've heard you refer to this as like your barbell strategy for talent. Can you talk a little bit about what that means and why you've landed on that approach?

So the barbell strategy is a concept from Nassim Taleb, which I know you can't read.

It's true, I can't.

You say you make it like—

I tried. And now you, you gave me that other book there, or I forget which one you told me to read. You're like, just get in the game. I tried, I couldn't do it, man. I couldn't get into it.

It's dense. Uh, so barbell strategy, he talks about And it's balancing really risky stuff with really safe stuff. And I always learned it. I, when I finished, uh, college, I was training for triathlons, uh, cuz I don't know, I had an issue. And there's this concept of garbage miles. So let's say I wanna run a 7-minute mile. Most people just go out and they train, call it 8-minute miles, and they just kind of like muck around in anywhere between 7-minute, 8-minute miles, and they just jog. And there's this idea people call those garbage miles. And so the idea is either run repeats or intervals at 6-minute mile or do distance and accumulate miles at 11-minute miles. Don't just muck, muck around in the beginning, in the, in this kind of like muddy middle to get the most potent dosage. And so I thought about that when I think about my hiring strategy. And I think that a lot of people, if I'm going to be just like mildly pejorative, I need help with marketing. Awesome. Most people muck around with a small businesses, let's say an $85,000 a year marketing person, and they're like, okay, this is going to solve my marketing problem. And I consider that labor rate for that specialty in the muddy middle. And so what I think is either I need somebody who's $5,000 a day or, or $200,000 a year, and I do week offsites with them quarterly if I can't afford to have them on staff. But then I wanna pair them with what I would think of as technicians, marketing technicians who can execute on a strategy that somebody else has developed. And and I try to split out of this gunky middle, either go low and just have somebody who can follow the playbook that's already been established, or somebody who truly has unique insights on developing a playbook better than I would've done myself. But this $85,000 a year marketing person, God bless him, isn't gonna be as smart as Peter is thinking about acquiring customers, but they're not inexpensive enough to just like technically upload 5 ad sets per day, which is what it takes to A/B test. Facebook ads or whatever it is. So that's, I think about splitting and getting out of the money middle.

Got it. And, and you apply this, uh, all over the, the company, not just in marketing, but in general, you're always looking for ways to solve most issues and systematize things with low-cost global talent and then bring in the big guns and pay up for world-class talent when it's needed, where it's needed, potentially on a fractional basis or consulting basis. Is that right?

It's quoting from a book, and people don't like this, but the implications of it are profound in my experience. And it's from E-Myth, a book you and I both know, which is your job as the business owner is to create the same output with the lowest level of labor possible. And it is not hard to build a great property manager if you pay everybody $200,000 a year. My job is to systematize, to create structure, to create best practices, to create lanes in the road so that I can, I can run my maintenance department not with $200,000 a year people, but with a LeadSimple and a coordinator who's $1,800 a month. That's the magic. And that's how you create all these wonderful downstream effects. So it's not hard to do it if you have Gordon Ramsay making all your dishes, but I can't afford Gordon Ramsay to be my French fry cook, so I have to come up with the recipe.

Yeah, appreciate the LeadSimple reference there. John always teases me because I've got a whole wardrobe full of LeadSimple swag and never stop talking about them. So my friend Danny Craig has a way of saying— he talks about architecting the way the work gets done. That's a phrase that I first heard from him, and I really like that as a way to articulate what we're talking about here. It's your job as the business owner to figure out how everything fits together and develop the systems and processes that are then followed by, by the team. And what you just talked about, which is getting the work done with the lowest cost solution possible. I know that you've got like a pyramid and you gave it a name. Talk a little bit about that. That's— it's so relevant for property management and really all small businesses. But in property management specifically, labor cost absolutely dominates our expense lines. There's no other cost that even comes close. We don't have— we're not buying materials. We don't have any big capital items. There's no big startup costs. We're not investing in a factory. We're not buying inventory. So it really is all about labor costs and, and that's directly relevant to what, what you were talking about.

It's the reason why property management, when I went to the NARPM conference with you in California, why 40% of the booths were global talent for property management companies is because the industry's margins are driven by labor costs, which makes smart business owners early adopters, whereas Even though HVAC has just as powerful of a case, it's not as much of a margin driver as PM. So in terms of the hierarchy, my silly nickname— it's kind of tongue-in-cheek— is based on Maslow's hierarchy of needs. It's Matzner's hierarchy of how work gets done. And the idea is it's a triangle, and the fatter the bottom of your triangle, the better. You want to push things downward. So at the top of the triangle, is the owner. Then it is expensive employees, which generally speaking are local, but not 100% of the case. Then below that, it's global talent. And then below that, it's AI and automation. And what your job is as a business owner is, is to design systems to push things downwards without reducing quality. Because it's not hard to stick something to AI if it sucks. But the magic is producing a similar output that Peter could do when he onboards a new tenant with either someone, a local employee, a global employee, or an AI and automation with minimal degradation and quality so that you can build leverage and just build a better company in just a million different ways.

Yeah, super, super relevant. And, um, the, the, the graphic is compelling. Maybe we'll I'll find a way to link to that in the show notes. The, I'll give a specific example that's really relevant for property managers. Let's take bill entry or accounts payable. As a property manager, you've got literally hundreds of bills coming in every month for all these properties that you manage. You've got utility bills, you've got vendor invoices, all kinds of things, and those need to get entered into the system and paid out. So in the early days when it was like me and 2 people, I did all this literally by myself. I would take the bill, open the envelope, scan it in, upload it, manually enter it, and then manually pay it. So that was the top of the pyramid, right? The owner is doing that work themselves. And then eventually I got to a point where I could have enough employees that I could have an employee doing that work. So it got pushed down a little bit in the pyramid, still a local domestic employee, so pretty expensive. And I, so I designed, I documented how to do it, right? That's an important part. And then I was able to hand that off and not really think about it again. And then the next step was we were, we started engaging global talent. So we were able to take everything except the scanning part and move that overseas. So still get the envelope coming in. It gets opened by an employee of mine, gets scanned in, and then the rest of the whole process gets completed by global talent. So picture pushing down one more level and then the final stage there, and we're not there yet, but I know there is software that does this. Which is it, this software's smart enough that all you have to do is scan it in and then it's able to recognize the biller and the property and the amount. It all gets entered in the system automatically. So that's automation and that's like that bottom level of the pyramid. That's the dream end state. And if you're not constantly doing that, if you're not constantly trying to push things down as the business owner, you get stuck at a certain size because you run outta time, right? There's, What else? You just— there's only 40 hours or 50 hours or whatever work hours in the week.

I would argue that one of the characteristics of a well-run growing company is the muscle movement of constantly pushing things down. And you— I know you just did an episode with John Seifer, and he quotes a line from an orthopedic surgeon, I think, which is everyone plays at the top of their game, and that includes global talent. So you're constantly saying, what is the top of Peter's game? For you right now, it's dancing on TikTok, making videos about LeadSimple. That's the top of your game, right? Content creation. But everybody, your local staff, your global talent, everybody is saying, is there anything I can build more leverage into this, into, into the way this work gets done? You know, Peter, just, just to be clear, you, you got, do you guys use Airtable at RL? Not a hard automation to set up if it's scanned. Have the trigger to the automation be whenever a new file is uploaded. You can then run an image scan versus OpenAI's API. And then you can say, pull out the address and put it in this column in Airtable, pull out the billing amount, put it in this Airtable. Like, that's not— you don't need to use some schmucky third-party software that's going to pay an arm and a leg. You can build that. Like, not that challenging of a build. Honestly, because API can do images now.

All right. You're making me want to end this early and go build that out. It's not—

it's genuinely not a hard one.

Love it.

It's genuinely not a hard one.

That's awesome. All right. So perfect. And we need to promote that image more. Masters hierarchy of business, you know, delegation or whatever you're calling it.

I don't know what I got. It's a bit of a mouthful, but we'll work on that.

We'll workshop it. Okay. So I was reading through your Twitter to get questions for this interview. Um, I like to kind of see what's top of mind for my guests, uh, as of the date of the recording. One of the things that I saw you recently tweet, and we've talked about many times before, is some Marine Corps manual or something. So what did you, what have you learned about delegating by reading these Marine Corps, like, uh, It's not like, uh, how to shoot a gun. It's like how to structure, uh, I don't even know how to articulate this, but it's very, um, it's not technical in nature, but they're, they're very like intellectual in how they, uh, describe and, and think about getting a group of people to work together effectively.

So I have to make the sales pitch on why I think it's worth it. And then I can talk about kind of how I use them and how I think about them, which is I am always looking in other disciplines to find deep explorations of first principles. So I don't find the answer within my own field. I find it in other fields in that when I think about how to manage the, uh, work output of my set of recruiters, I go to systems engineering because workload management is like the third day of systems engineering. Hey, here's how you, how, how you determine a function. And I watch 10 YouTube videos from some, and I'm like, okay, I don't understand any of that, but I understand you have a sorting function that sits in front of the job assignment function. And okay. And so when I think about leadership and decentralized, uh, operations and ambiguity and tempo and speed, There is no organization that has higher stakes to getting it right than the Marine Corps. And the Marine Corps is really smart in that. And I, I, there's a great book by Thomas Ricks called Making of the Corps, where the Army has its tanks, the Air Force has its planes, the Navy has its ships, and the Marine Corps has its culture because they are the underfunded stepchild of the Department of the Navy. And so they are incredibly deliberate about instilling the culture, the values, the way of thinking, the leadership in a way that I don't see other organizations do. And because the stakes are so high, you can't hop on Slack to ask a clarifying question when you're a Marine Corps infantry leader. So they have to develop incredibly disciplined ways of delegating., or of making a decision when you don't have full information or planning something that is going to change rapidly as you go. And so these, uh, manuals, MCDPs, they're called Marine Corps. I don't know what the DP stands for, but if you Google it, there's a bunch of them. And as a student of history, which I am, they're explaining first principles. And if you can get past the war stuff, which is if you're smart, you can, This is a truism on when you told your head of the maintenance department to do something and he got confused. It's because if you go to read the Marine Corps thing, it's, oh, I did not give him an end state. I just gave him a task. And now you study Marine Corps ideology and they say whenever you give an order, it's always a task and an end state. So they might change the task as long as they're clear on end state. You're like, That is such a first principle, profound way to think about delegation. And so I dive into those materials as an exploration of first principles to make me a better leader, to empower my subordinates better. And all you have to do is just do a little bit of mental math to go, we're not talking about invading Iraq, we're talking about opening up a new facility. Okay. And then you get this rich, real-life-hardened, leadership and communication and logistics and project planning if you can just get through the machine gun stuff, which is not that dense. Last thing I'll say about it, about the Marine Corps, is everything they write can be read by an 18-year-old high school graduate. The idea of these is that, and they're distilling Clausewitz, Sun Tzu, Napoleonic era naval tactics. They're distilling it so that an 18-year-old can read it.. And so you read it and it's, it's accessible. And so I just find it to be such a rich source of first principles thinking around a lot of what I try to do in my business.

I love that. And there's really something to this idea of like cross-pollination where like you start out saying you go outside your industry to look for insights that you can map onto something you're doing within your company. Um, I, some of my favorite people are those folks who make time to go to like insurance industry conferences because insurance actually has a lot in common with property management in this specific way. And they come back with these really interesting insights and stuff that like in other industries, they just take it for granted that, oh, of course you're doing this. Like, why would you not? Obviously, if you have a recurring revenue business, then you set it up on Stripe. And if the credit card gets swapped out, then it automatically goes to the new one and you're like, What? I've never even heard of that. Of course we should do that, right?

I fell in love with this, Peter, at my senior year of college at Penn. And there was a class called consociation. It was a political— it's a political principle. It doesn't matter, but it's essentially comparative politics. And it was consociation in deeply divided societies. And it sounds so silly, but did you know that there isn't one president in Switzerland, there's five. Not every country has a bicameral, a two-house legislation. Not every country has a federal law enforcement function. Sometimes it's driven. And so when you start to look, it lets you go, okay, what's the real first principle of a national police force versus a local municipal base? Okay. And Germany does it like this, but Lebanon, The deputy prime minister has to be from the Druze sect, not the Shiites. And it starts to force your brain to go like, wait, why do we do it like this? And so I fell in love with this comparative style of thinking. You want to gain weight? Study what the sumo wrestlers do. Like, once you hear it, it gets in your brain. It's like, who knows how to cut weight fast? The wrestlers. Who knows how to gain weight? The sumo guys. Who knows how to— structure in a deeply— who knows governance the Lebanese? Because they have such a deeply divided society. And so I think about it from subject matter, and it's the same reason why I'm obsessed with interrogations or therapy. Who knows one-on-one conversations better than therapists and interrogators? Because it's a distilled human interaction. And so the principles of active listening that a therapist have, are world-class or an interrogator, right? It's distilled one-on-one. So I'm always trying to find other, other sectors, business models, ideas where they're really driving down into something that I don't take that seriously.

Love it. So good. So you've, uh, you've really gone all in on Passport and we're going to get more into that. But before we do, I want to talk for a minute about opportunity vehicles. So you explored many different ideas for businesses and started many companies prior to quite publicly going all in on your current opportunity vehicle or company. What were you doing back then that led you to try all these different things and what did you learn? And then finally, why did— what happened that made it clear that this was the opportunity you should go all in on?

I was hoping you'd ask about that, which is, which is my dad gave me this advice 15 years ago. And he said, John, when you meet the right woman, it's not hard. Because I was in the middle of a difficult relationship, and it felt like I was like there was a hole in the bottom of the canoe. And he's like, look, it's not always been easy with your mom, but we've been married 30 years.. And it's never been hard. Like, we've had fights and we've whatever, but it doesn't feel hard. It feels like you're walking downhill. And what I think is hard is that until you felt that feeling, it's really easy to say, oh, I could totally make this work. I can make this work. Yeah, sure, we fight. And until you experience the person you're going to spend your life with, like my wife— I was about to say my current wife. My wife.

You ever meet guys who introduce their wives? Yeah, this is my current wife.

That's always good for a laugh. Not going to say current wife. My wife, the minute— in all my relationships, I don't know if we should move in together. It seems like such a big— I met my wife and I'm like, I'll sleep on a cardboard box so we can be together. I don't give a shit. It wasn't even a decision. And I think until what I was looking for in a bit of business, and I think there's probably— you could probably help me explore this, but it was a combination of a product, a team, a business model, a market that all work. And I've had pieces before where I'm like, okay, I love working with Peter Lohmann, but God, I hate this industry, or I love working with this person, but Ooh, our business model isn't the right one to pursue this particular model. And so what I was searching for was a combination of factors that made it feel like when I met my wife, where it was just like, look, it's not going to be easy, but we're walking downhill. Like, and that was what I was searching for and experimenting, which was tried something and go, ooh, okay, influencer distribution is really exciting, but this isn't the product to use it on. Okay. Ooh. And so playing with different variables and not exactly like isolating them in some sort of wonky way, like today I will test not that scientific method falsification, but in the back of my mind going, okay, I really like this, but God, I don't like this. And just basically trying to find the Rubik's Cube until it all snapped together and like the Avengers glove. All of the stones went together, you know? And so that's where— and once you have that, I also, which we can talk about, like, burn the bridges, go all in. Once you've, you know, John Seifer always thought of me, and I'm actually very proud of this. He once labeled me as like a tinkerer, as an ex— like, oh, you don't want to build businesses, you want to tinker. He didn't realize that what I was doing was searching. And now I'm not— you don't see any tinkering. You see right down the middle of the road. And so I was very proud of being very deliberate in tinkering until I found the right vehicle. And then it was, no dude, I, no to every, like, no to everything, everything, everything, everything.

Yeah, I, that, that all rings true to me. And I definitely observed you sort of iterating both on business models and partners and markets as you were trying to sort of find that, um, sort of golden hour where everything comes together. And even the, uh, even the actual business that you're in right now is really a very small but important tweak on something that you've been doing for years. So a lot of people are looking at, at Passport right now, which is the name that you guys have landed on, and they're thinking, oh wow, look at this overnight success, they came out of nowhere. Like, but I know behind the scenes that you've been working on this for years, really. It was just kind of syncing everything up in just the right way that you, that you hit, you hit escape velocity with it, basically. And you knew when you hit it. So I guess what I observe about you in this process is that, and I, of course, there's a lot of things to talk about, but one of the things I think is relevant here is You, you held the businesses lightly, the businesses that you were experimenting, experimenting with and starting up and iterating on. They felt, um, it felt like you were holding them loosely, not in a negative way, but I think what, what a lot of people potentially, including myself, struggle with is one, their identity gets tied up in any business they start. And so to shut it down means failure, personal failure. And also, um, it, it's just like the idea of when you start something new, um, you, you work at it. You can't give up until you've given it at least 2 or 3 years, right? That's just common sense. But that's actually not, you would argue that's not common sense. That's not the right approach. So I want to tease out a little bit more about your thought process that allowed you to do this.

The first thing I'll say is, to your point, 20 years ago, I was sitting as a freshman in college studying Arabic flashcards, meaning 20 years ago. And that's all— that's been what's helped me source Egyptian cold callers better for Passport. Is so it's, it's accretive. 20 years of spending the majority of my professional career. My only break was when I ran Garage Excel for 2 years where I was not essentially working towards every other thing I've done since freshman year of college has been accretive to the launch of this. So I think of that as 20 years. My Spanish is passable. I've lived in Argentina. Like, so, so to your point, this, it feels quick. It's was not quick at all, to be very, very, very, uh, clear. I will briefly mention a military thing, uh, and it's in the Marine Corps, but it was originally from an Air Force pilot called the OODA loop, or Boyd's loop. If you've heard of Colonel John Boyd, there's a book called The Fighter Pilot That Changed the World, which is recommended. And he developed this model for understanding maneuverability, and it started with Our planes are slower, they can't go as high than the Russians, but we're beating them. How? And he started in dogfights in Korea, I think, or Vietnam. I think it was Vietnam. He started flying in Korea and then he developed the theory post-Vietnam. That's what it was. And what he determined was it was because of two things. First, we had a bigger canvas bubble so we could see more around us. And second, our turning radius was faster. And he said that maneuverability beats all. And maneuverability is defined as the OODA loop or the Boyd's loop after his last name, which is observe, orient, decide, act. And your job is to run OODA loops as quickly as possible because while your opponent in the market is still running an OODA loop that takes 6 months, you've already run 7 OODA loops, and you are now running on most relevant, quickest. And there's a whole thing about messing with your opponent's OODA loop, right? You try to slow their OODA loop down while you speed yours up, right? It's why we attacked— basically, Boyd's theories were why we attack all the command and control centers when we invade countries now, because he's like, it doesn't matter if they have the biggest army in the world. If they can't run their OODA loops quickly, we win. And so when I think about— it's a very esoteric answer, but I know you'll bring it in. I'll bring it.

I'm coming.

I'm coming in, baby. So, but I want to talk about the first principle for people who like that kind of stuff. That's the first principle is speed of OODA loops. And so for me, as I'm looking at opportunities, I'm trying to think, how quickly can I run this loop? How quickly can I observe, orient, decide, and act and run that? Because I'm going to be able to be— if my OODA loop is 2 years long, you don't get much. Even if it's weaker, even if my army's smaller, so to speak, my resources are smaller, I can try 50 experiments before Peter has decided to do one X. How much better am I going to be? Even if Peter's smarter, has more money, has a bigger audience, Because I'm able to cycle so quickly, I can just— it's iteration, it's speed of iteration. There's a million, you know, this is really truly a first principle idea. This—

yeah, it's like if, if every new business you start has, let's say, a 5% chance of becoming a $10 million company, you, you're better off starting 6 companies a year versus one every 3 years. If you can quickly ascertain, you know, with 2 months of effort, the, you know, the, the, the size of the opportunity.

And just say, what is the other model that I layer on top of that is, do you know the juggling monkey thing from Google Ventures? I talk about that a lot or think about that a lot. No. The juggling monkey is Google Ventures said, if I go to Peter and say, Peter, we need to train a, uh, monkey to juggle on a pedestal. Here's $1 million, go. And you spend the next year giving me updates about building the pedestal. And you go, that ain't the hard part of that project, brother. And literally the shorthand is pedestal building in our companies, which is it feels like progress, but you haven't done the hard thing yet. And so when I'm doing this OODA loop, I'm always trying to think what's the juggling— I haven't heard that.

Oh, the juggling.

It's— I stole from Google, uh, and it's like, what is the juggling monkey of Peter building a newsletter business to sustain him? It's not writing the content, it's not whatever, it's getting sponsors who can pay this much. And so when I'm doing my OODA loop stuff, it's always against the juggling monkey, not against the ramp. And so it allows you to very quickly say, what is the center of gravity to this effort? And I'm only gonna think about that. I'm not worried about when we launched, it was like, can I acquire customers? Can— will they pay under this model?

It's—

those were the— those were the juggling monkeys and certain business models, not can I—

what SaaS I use to host my community. And so what I think a lot of people mistake here is even folks who maybe know you well or other people like you, they mistake your focus on the monkey for, um, lack of attention to detail, lack of planning, not interested in, um, figuring it all out before we get started, right? Like, I, I can picture someone working with you kind of being like, John, we haven't talked at all about our articles of incorporation. Like, we have to get that done. And it's like, yeah, obviously we're going to get that done, but that's That's the—

this is this autobiographical? Peter, is this autobiographical?

No. But you're maniacally focused on like the hardest thing so that you can quickly figure out if it's solvable. And if it is, then yeah, you'll circle back around, you'll figure out all the documents, you'll figure out the CRM, you'll figure out the web hosting, you'll get someone to do the website, you'll put up some ads. Like all of that is not the hard part. And I think As, as for if you're listening to this, if you're, if you're working with a partner, you gotta recognize what are their strengths and what are their weaknesses. Like you ask someone like John to spend the next 3 weeks nailing down the partnership docs, that's not gonna go real far. But his superpower is figuring out the hard thing and figuring out if it's solvable quickly.

Right.

So I think that's a really interesting, um, you did a great job articulating that.

So thank you. The other model that I like— did you read How Will You Measure Your Life by Clayton Christensen? We've talked about it before.

I've mentioned it to you.

I haven't read it. No. He has a different model that might be more approachable for some people. That's similar. It's the exact same phenomenon as the juggling monkey, which is he says, when I'm starting a new business or a new effort, I list out the hypotheses that need to be true for it to work in order of difficulty. So most difficult at the top. Least difficult at the bottom, and then, i.e., juggling monkey at the top, ramp at the bottom. And then I try to identify quick and cheap ways to validate that hypothesis that don't involve me spending 2 years and $10 million. And I work my way progressively down the hypotheses. I can get newsletter sponsors via cold email. Okay, you don't have to launch a company and commit and tell you what's the cheap and fast way to do that. I'll send 5 emails today. I'll know by tomorrow.

Awesome.

If that's a no, you have to reassess your hypotheses. And so it's, he actually has a little bit more of a structured exercise to identify the juggling monkeys. It's in the beginning of his book, uh, How Will You Measure Your Life? And it's, uh, also another, what has to be true for Peter to go all in on the media business? You don't have to close down RL to test those hypotheses. But at the bottom it says, can pick a CRM that works? Who gives a shit? But getting sponsors to pay $5,000 a newsletter? Ooh, I need to get some data on that before I—

that's how I think about it. One of the things I see people struggle with here is that what you're describing with the OODA loops and fast iterating and tackling the hardest thing first and moving quickly, it speaks to something that's generally true in business, which is that You need to move quickly. You need to make decisions quickly. You need to attack problems quickly. You need to try stuff fast, right? It's, there's almost nothing in business that's a one-way decision. Almost everything can be reversed. And what lets winners pull ahead is they just, they decide and they act, decide, act. That is so completely different from the skills required for great investing. And my partner and I both share a love of investing in equities or private companies or real estate. And when you're making a decision on what company or business or piece of property to invest in, that is a one-way decision. And it's something that if you make 2 or 3 good decisions a year, you're doing awesome. And if you compound that over a lifetime, You're going to be a multimillionaire easily. And so the discipline required to be a great investor is 180 degrees out of phase from the practice of being a great business person. In business, you want to make a bunch of decisions really quickly using your intuition. In investing, you want to make as few decisions as possible. You don't want to be buying and selling all the time. You generally want to let your capital compound and you want to take as long as necessary to make those decisions. So it's actually been challenging for me to move back and forth between my business owner hat when I'm in RL Property Management or I'm spinning up a newsletter. Gotta make decisions quick, gotta get stuff done, gotta figure out if it's working. And then I gotta shift back to sort of my capital allocator hat and my investing hat and think about, do we want to make an offer on this 48-unit property? I'm not sure. Like that's a big, you know, that's like a quarter of my net, you know, net worth is going to be tied up in this. Decision, right? So that's been a challenge that I've identified. Is that something you struggle with at all?

One of the greatest gifts of my early career was, was having a mirror held up to me, which helped me reveal some of my blind spots, right? It helped develop my sense of self-awareness, and it was a gift of some of my early career. And I am— and we've talked about this, and I don't mind talking about it now. The first thing I'll say is I am not an investor, nor do I ever aspire to be because of precisely that. It doesn't suit my disposition. The second thing I'll say is I'm also not a big company leader, and I've already had discussions with my co-founder, which is there is going to be a certain point where my speed and energy, which is literally the thing that makes the company go round, is going to be a detriment.. And so having, I think, a sense of self-awareness about your strengths, what you're good at. I'm not like some bullshit visionary idea, but I also recognize that as soon as we have an HR department, I need to be put out to pasture. Like, I just, I wouldn't, I wouldn't. Now give me something else that's productive. Let me go evangelize. Let me go create content. Let me go make big enterprise sales, whatever it is. I can still be enormously contributory. But right now is where I'm at my best. I am best on an agile pirate ship, not as the commander of an aircraft carrier. And so I think if you can do some self-searching, ask your partners, ask your confidants, where do you see me thrive? Where do you see me flail? I have no problem saying I don't know if I'm ever going to be the CEO of a $100 million company, but I'm really good at the pirate phase, which is where I think I'm good. And so having the self-awareness to say, I'm not an investor. Maybe I'll put some money into deals, but I'm not an investor who can look at 100 things and make one bet. I just know that about myself. I'd be like, the second one, I'd be like, I'm in. So that's just my person. I'd be like, yeah, we can totally make this work. But making it work is not what writing checks is about. So I have no desire to do that.

None. That's great. I love that you have that insight into your own sort of psyche. When I think about myself and my business partner, I know that he's much more analytically minded and, and definitely has that investor approach to things that comes very naturally to him. And in fact, the speed of iteration required in business, I make up that it makes him uncomfortable, but I'm, I'm more comfortable in that role. So in some ways we're a great pairing that way. Yeah. Okay. I want to come back to global talent. So this is, this is a highly relevant topic for residential property managers. I want to start with, kind of a, kind of an easy question for you, which is what do companies who are the most successful at working with global talent do differently than those who are average or strike out?

Do you want me to— can I give—

can I start with my normal esoteric answer and then, and then bake my way back in? Yeah. If anyone hates that, they already have turned this off by now.

So yeah, they're, they're bought into my, my, uh, end around.

Well, when you look at the Constitution, Peter, I mean, just—

I, I've become, I've become, I've become a parody of myself. If you— I can't even say it, but it's important. I'm going to say it. If you look at Coase's theory of the firm, from, from— he's an economist from the early 20th century— what drives firm size is transaction cost. Should I do this inside my company or outside my company? And, and for 40 years, up until about 10 years ago, the transaction costs associated with global talent meant that it only took one very particular flavor. You went to McKinsey, you said, here's $100 grand, I need 50 call center agents in Manila. I don't know anything about them. I just hand you money. I have to fly there. There's no video conferencing. I don't know who these people are. All they do is the low-level accounts receivable or level 1 support tickets. And if it's less than 100 people, it's basically like CapEx. Like if I can't justify an office in Manila or New Delhi, it's not worth me thinking about global talent.

Yeah. Put it, put it this way. Imagine working with someone from the Philippines, except you have no email, no Slack, and no Zoom. Correct.

Literally, you don't know how to pay them. And they don't have internet at their house because high-speed internet has not proliferated. So you go to a BPO and you're a Fortune 1000 company and you take 500 seats and you put them in, in downtown Manila in a big office building and off you go.

So what I love that you're doing here is that you're sort of, you're, you're, you're what you're, what the question you're asking is. Why is global talent happening now? What, what, what has changed? Right? And that's a very interesting way into this topic, which is like, well, like what? Things don't just happen for no reason.

So why is everyone suddenly talking about this now? Transaction costs, Coase's theory of the firm, which is I don't have to hire McKinsey. This literally live on this call, I could hire pay and supervise someone in rural Pakistan. That was unheard of 6 years ago, to pay them, to get on a video call with them, to find them, to— the transaction costs were too high, both in time and money. And so the business model was built of outsourcing, as, as is the term, around a high transaction cost environment. Post-COVID, and it wasn't really post-COVID, but we'll say post-COVID because it's easy, the transaction costs have evaporated. And so what that's allowed for is smaller companies to directly hire, train, and supervise people from around the world, not just in Philippines and India, not via some middleman agency that's trying to hold on to their middleman status.. But to just have these people be a part of your team. And that is the difference. Going all the way back to your original question, the difference between who makes this kick ass and who doesn't. It's people who use global talent as— or they say outsourcing, or they say VA, and they use it as a synonym for robot versus the people who say, oh, that's Beth. I forget where she is. Is she in Fort Lauderdale or Buenos Aires? I don't— I genuinely don't know that if you can say a phrase like that, you are going to get the most out of this talent pool versus if you say, oh, it's not important, let's give it to the Philippines, or, oh, it's just kind of basic stuff. If you're not very specific, it doesn't work. So it's people who take this source of leverage seriously and directly integrate with global talent. I— what I tell people is I hire people who just happen to be in other countries, not, oh, it's this whole different thing that it's completely different. It's like, no, it's not.

So that's the difference. Got it. Yeah. The, and I'll speak to my own experience. Um, I see folks most successfully here, they, they try and merge their talent pool, all of their employees to use as close of a process as they possibly can. The interview process is similar. The onboarding process is similar. The training and education process is similar. The benefits package is similar as much as they can. Now, obviously there's some things that don't, you know, that you can't, you just can't, but they make the effort and it's just like you said, they're looking for the best maintenance coordinator they can find for a given price and where that person is from is not really that important because it's a contractor and they're going to be a full-fledged team member and they're going to receive the same onboarding and training and support and they're going to be in the same Slack and they're going to get the same days off and, and all of that. Um, versus like, yeah, some thinking about it as just a VA, uh, just an assistant is all they could ever do. And if one person leaves, you swap in another, it's like the same thing.

That's not the way to be. I will add as well that I tell people that I hire globally to increase the quality of my company and happen to save money. I don't fire people and then replace them with somebody cheaper. That is 20-year-ago methodology for global talent, PE post-acquisition juice earnings playbook. That is not what I do. I go, I can get somebody absolutely fantastic. And all they do is they're the key account manager for our 5 largest—

what do you guys call them? Investors?

Yeah. And owner clients. Yeah. Owner. So I take my 5 biggest guys. They all own— they all do 20 doors or more with us. And I brought somebody on full time and all they do is try to make their life easier. Is that a cost-cutting measure? No, you wanna finally build the company that you want, that you can't afford if they're sitting in Columbus. And so people also who thrive with this is this cost savings is a secondary concern. Building a great company and developing true customer service and true customer intimacy is usually the primary factor.

Love it. So I wanna get into the interview and hiring process. This is something you're certainly an expert on., and something that a lot of people have the most uncertainty around. So I think I've heard you articulate that when you're hiring global talent, although you do want to, you know, obviously interview folks in the same way, in some ways it's also a lower stakes, um, it's a lower stakes effort than if you're bringing on a W-2 employee. How, how, how should we think about that? Like if, if we're interviewing someone for a global talent role, What are some of the best practices?

I am very opinionated on this and recognize that I might be completely wrong. And so this is very much art, not science, but I can give you my view of the world, which is, it's the same way that I thought about hiring sales reps in some of my previous organizations, which is when I would bring in an experienced sales rep, who knew property management sales or home improvement sales or whatever, it very, very rarely worked because I did not bring them up in my way of doing business. I had to— oh, they didn't use the iPad and they hated LeadSimple and they would try to pop by the office and I was just like, it's not worth it for me. It's not worth it for me. And I have to pay up for that person because they've got 15 years experience. And so I would hire as sales reps bartenders because they're salespeople and they're dying to enter the white collar world, or hospitality professionals or restaurant managers. And what I keyed in on was what I think of as the big 3 characteristics that I hire for, which is general intelligence, coachability, and energy. And if they have those 3 things, you always have a job at my company. I don't care if you don't know how to use Notion, because if you're energetic, coachable, and smart, you can be better at me and Notion in 10 days. And so saying, Peter, can you find me somebody who knows Notion? What are you talking about? It's no, you want somebody who's smart, energetic, and coachable, cuz I can't teach those things. And then They— I have those people floating around. I can turn them into a— my LeadSimple expert. Hey, here's— go take LeadSimple training, go watch all the videos on YouTube, and in 2 weeks, in a month, God forbid, they know more about anybody than your— so the idea of I just need somebody with LeadSimple experience is dumb to me. Now, if it's Ruby on Rails coding, sure. If it's Trust accounting, sure. But there is a very, very small set in my experience of skills that I really need to hire for. I like the soft stuff and I've been— she was a $3 an hour virtual assistant and now I think she has 40 people who work for her.

So how do we, how do we tease out whether someone has those characteristics during the interview process or Do we just do some basic checks and run 2 weeks with them and make the decision at that point?

Both is— and I'll get to them in turn. So the first thing that I advocate for, generally speaking, is almost like a consulting interview, which is, Peter, tell me about a time you got feedback and what you did. What are you listening for? Coachability. Right? And if they go, I've never gotten feedback, I'm always great, doesn't sound very coachable, right? Or maybe you coach them live in the interview. Hey, you did something a little weird there. Do you want to try a different answer? And if they get defensive and say, no, I didn't, right? So I almost run like a consulting interview. How do you test intelligence? How many hotel rooms do you think there are in Manila, Philippines? Talk me through your thinking. What are you listening for? I don't know. I just want to hear how they think.. And so I almost run consulting interviews like consulting style because it's not like, tell me about your experience in, in LeadSimple. Dude, LeadSimple is so easy if they're smart. So easy, right? So that's the first thing. In terms of the second thing, especially given the mechanics are very straightforward to hire globally, I also take the pressure off myself in terms of finding somebody great. So if some— the best way to find— and I wrote a newsletter about this.

I think this was the first newsletter I ever wrote.

Is this the same newsletter where I was your first subscriber? You weren't. I was about to mention that you were my first subscriber. I've got thousands now. The— I'm glad you got that in the— and you made me switch to Beehive after being on Substack. That was your doing as well. The Navy SEAL strategy, which is the Navy commissioned a huge study. We need more Navy SEALs. Are they prior athletes? Are they white guys? Are they wrestlers? Are they smart? Are they dumb? Are they black? Are they white? And they did this huge thing because they needed more Navy SEALs. And at the end of all of that, they went, here's how you find one Navy SEAL. Take 50 guys who say, I want to be a Navy SEAL, and beat the shit out of them. And the last guy standing is a Navy SEAL. Because, and so for me with global talent, it's like I want a Bincy. You know, the best way to get a Bincy? Hire a bunch of global talent. Some of them will work out, some of them will cap out at a certain level, and some of them will just keep going and you take more responsibilities. I can't pick them in advance. I don't know anybody who can, but I can say basically, okay, bad fit. Okay, good fit, but they'll never be more than an operations assistant. Okay, they cap out at this level. Oh my God, I've got a Bincy on my hands. They're going to be my CEO within 5 years. Which is the track that Pincy's on. And so I don't put this, oh, I have to do Myers-Briggs. And I'm like, dude, I don't know, man. I just haven't seen that stuff be highly causative. I guess it would be correlative, not causative. I take the pressure off myself. That's how I do it. And that's part of the reason why I don't like the headhunting business model is because it's so expensive to hire people that you can't iterate and get a lot of hire. Hey, I'm gonna hire 5 people. One of 'em's not even gonna show up to the first day. 2 of 'em are gonna be solid and one of them I'm gonna be able to promote and eventually become my maintenance coordinator. You can't do that if you're paying 7 grand a pop. No way.

Yeah. So, so it sounds like the take-home lesson here is take the pressure off yourself when you're making hires globally. And, uh, some of 'em aren't gonna work out. It's okay. Doesn't mean you write off the whole concept, which is what I've seen some folks do. Oh, they say, Oh, that doesn't work. Uh, I tried it once, right? You know, it's just like, okay, maybe try 2 or 3 times before you write off, uh, a concept that can potentially save your business hundreds of thousands of dollars a year.

I will insert as well a pitch that I give people all the time, which is Passport, Second Passport, our company. The analogy that I use is hiring somebody globally is like me selling you a dumbbell and then saying, go get in shape. You need a dumbbell to get in shape. But if you eat a gallon of ice cream every night, doesn't matter how good the dumbbell is. And so part of what we started with Passport was the idea that I want to help you get the dumbbell and you need the right dumbbell, but I also want to talk about your nutrition. I want to talk about how not to get hurt. I want to talk about if you should be using a barbell instead of a dumbbell. And you've seen it. You're in our group. You've seen that we are all working on the methodology, not just the dumbbell, because, oh, hey, do 3 reps of 10. Oh, I didn't know that. And so somebody sold you a dumbbell and now you're like, I'm still fat. And then you actually get the support in an ecosystem and you go, oh, I'm doing the equivalent of eating a gallon of ice cream a day. Doesn't matter how good I am with the dumbbell. Oh, you mean you don't have a written down place where they can know what a good job looks like? No wonder you're still fat. And so that was part of what we created through this iteration process was why don't more people hire globally? Oh, because people are just selling them dumbbells and then saying, get in shape.

Love it. And I think you guys are doing a fantastic job with that. I saw a quote from you. I think you and Bizzy were discussing this concept. This will be the last thing we touch on with hiring. You said, don't, don't over-index on polish when hiring.

What, what did you mean by that? What I meant was there are, and I learned this in my previous career, which is one of the silliest mistakes you can make, and I made it and then I was quickly corrected of it, is if somebody has an accent, they're dumb. No, that just means they're speaking their second, third, sometimes fourth language.

Yeah.

How many languages do you know?

Right.

That's a, how many languages do you know, brother? At the business level and you want somebody who speaks perfect English, hire an American. Hire an American. You want somebody who speaks perfect English who lives in Argentina, hire an English teacher. They might be dumb as a stone and don't even know how to log into Gmail, but they have perfect English. And it's very easy to use these dumb heuristics like their audio was bad. I don't give a shit.

It's like an underpriced asset.

It's based— it's like, it's like when the broker listing is ugly. Don't just look, do an underwrite the property. Don't just look at the pretty pictures. And a lot of people when they hire, look at the listing photos, and if they're not pretty, they go, that's a bad property. And then Peter, who's disciplined, goes, oh, look at the cash Holy crap. Oh, the reason why they're not— nobody's bought this is because it's a bad broker who had typos in the listing and bad pictures. But I'm disciplined. And it's the same way with hiring, which is I intentionally look for people who maybe need a little bit of polish. But I'm like, if I— this guy's brilliant. He has a, you know, he's got an accent, but God, I don't give a shit. He's going to be our staff accountant. And so I intentionally look for people who are unpolished because it's very easy to build polish. Like, takes a month or two. Hey dude, I'll send you a mic. Put the camera at eye level. Stop using so many emojis. And in 2 months they're like, oh, Jon, I want what you have. It's actually to the point where I'm thinking about building a school of polish where literally I will polish these people before we present them. Because people— it'll be free because people over-index on it so much. And they're like— I'm like, do this for 2 months. When you finish that, then I'll present you to Peter because Peter's too busy to be able to see through Polish.

Yeah, well, I think that's, that's a really great explanation. And I think it's something that's— it's obviously human nature, right? It's our brain is hardwired with some of these shortcuts that it wants us to take when we're sizing somebody up. It's, it's, you know, it's ancestral, it's in our DNA, whatever. I think you've been really successful in overriding a lot of that and seeing through the bad connection and the accent and someone who looks different than you do and connecting and understanding their potential as a human. I actually, I wouldn't say that that's something that comes naturally to most people. What's kind of the way in here? Like how, what would be the advice you would give someone who says, I agree with you philosophically, but I just have a hard time when I get on and it's taken me all this work to understand what they're saying.

The, the first thing I would say is I'm not perfect in that because I live and breathe this every day, it's easy for me to say this. But when I look at an Airbnb, I use heuristics. And if the photo's grainy, I skip it, right? Which is I use these shortcuts and things that I don't live and breathe. So first of all, like you're a busy, overworked property manager. You don't have time for polish. Like, I'm empathetic to that. That's the first thing I would say, because in other parts of my life, I'm like, oh, this guy's short, he must not be a good leader. Like, what? Like, but literally, we all have to use heuristics just to survive. So that's the first thing I'd say. Uh, the second thing I would say is figure out what you really care about and try to throw out extraneous data. So for me, It's— I'm assessing 3 things: intelligence, coachability, and energy. I am not assessing Zoom setup. I can spend $23 and buy them a new mic. We now have— and say again, you— what we're launching, which is free training for all of our members, global talent. Our first one is accent reduction. Our next one is going to be introduction to first-line management. And so we're trying to solve a lot of these problems because honestly, I have low hopes for people to ignore polish, but because it's so easy, I'm just gonna say, fuck it, I'll polish 'em and just improve my product, right? Because it's so easy. I'll teach them Notion for a week because all these dweebs say, John, I want Notion like yours. Find me somebody who knows Notion. I'm like, nobody knows Notion like we do, but I can, I will just teach them Notion. And now I get to say, get somebody who looks good on camera with Notion, who's got— fuck it, fuck it, I'll do it. Because it's so easy. But I understand it's easy for me because I live this, but it's not easy for the guy who's, you know, overworked and doesn't make enough money and his wife's already yelling at him.

So that's— I'm just gonna fix it. Sure. I love that. It's so fantastic. Awesome, John. This has been really great. Um, appreciate your insights on global talent and first principles. And, uh, we've covered a wide range of awesome topics today. For folks who want to follow along with you and what you're up to with Sagan Passport, what's the best place for them to do that?

My Twitter is good. @matsnerjohn is my Twitter handle. My newsletter is Lazy Leverage on Beehive. If you want to check out Passport, it's, uh, saganpassport.com, uh, named after Carl Sagan. And then we just needed another word, so called it Sagan Passport.

Beautiful. Thanks. Thanks so much, John. This was fun. Pleasure. If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website, peterlohmann.com. I try to share as much valuable property management content as I can on a regular basis.

Thanks again for listening and have a great week. Mm-hmm.