In the last issue I discussed how applying the principles of restraint & soft offense have saved me a ton of energy in building Crypto Tax Made Easy.
They’re great tools against entropy.
Entropy is just a fancy way of saying - 'wasted energy'.
So go back to that issue if you find yourself constantly throwing shit against the wall to see what sticks.
(And getting burned out if it doesn’t.)
You’ll also see that interviewing accountants & developers was one of the areas where I was wasting energy.
So you might be surprised to learn this issue is about how I hired an accountant to join the team at Crypto Tax Made Easy.
And how going level 1 & 2 Karen fixed a (potentially) massive problem.
Before we get into the philosophy of Karen, I want to distinguish between the time wasting vs. productive parts of this hiring process.
When I originally started interviewing accountants, I did not have enough work to delegate to them. And I would not have had enough revenue to cover their salary + have enough profit left over for my pay.
So I was trying to solve a problem I didn’t have yet.
A better use of my time would have been generating enough demand. And only hiring an accountant when the demand was sufficient to cover their salary + my draw from the business.
Luckily, I only had 3 entropic hours setting up and conducting interviews.
But I also wasted a lot of time deliberating the compensation structure.
And I wasted energy worrying about the downside risk of putting someone on payroll at this stage in the business.
Especially because Crypto Tax Made Easy didn’t have enough history to determine whether our high initial demand was due to seasonal factors.
The business was only one month old at the time.
Adding payroll expenses (a fixed cost) means that our breakeven point would go up substantially.
I didn’t have the data to determine whether that would create negative cash flow months.
For me, I’m not willing to have this business have a negative cash flow month ever.
Not only that, but when I first started considering hiring I was still refining the system for doing other people’s crypto taxes.
I was arguably top 0.001% in the world at the process (function of being first to market).
But in retrospect I have already doubled my efficiency since I first started interviewing accountants.
Hiring & training someone back when my process was half as effective would have created even more entropy.
Why?
Because:
1)I might have handed off the work prematurely. Consequently, missing out on hundreds of hours experience with the process. Hundreds of hours that have allowed me to increase efficiency & effectiveness by 100%.
The early hand off could have ‘locked in’ an inefficient process. And that means I wouldn’t be able to drive down the cost of delivery over time.
This would hurt velocity of growth, profit margins, and competitiveness.
2)Unlearning & relearning. If an employee was on boarded to the old process and then I created a new one 2x as efficient...they would have to unlearn AND relearn the new process.
Their initial training would have been mostly entropy.
So, it’s a good thing I waited to until it was obvious that I needed to hire someone.
Sometimes, if the answer isn't obvious, the best choice is to wait.
And cultivating a state of receptivity will allow the answers to become obvious (more on this in a future issue).
So what signals did I receive that let me know it was time to hire?
First - more data.
I knew demand was artificially inflatedprior to October 15th due to tax deadlines.
And that Oct 15-Nov. 15th, being completely devoid of deadlines, would likely be a better indicator of the low-end of demand.
The period Oct 15-Nov 15 showed me both how much $ I could afford to pay an accountant, and how much work I might have for them.
Second - the process approached a productivity asymptote.
I am confident that any improvements in the process will be marginal without software assistance.
Therefore, I can hire & train an employee and be confident that the process will not need any major overhauls to improve quality.
Third - timing.
I've built multiple service businesses across industries. Invariably, whether hiring for a skilled or non-skilled position, there is a 3-month probationary period.
During the first 3-months, it becomes obvious whether a hire can cut it. And I never expect them to perform at their full potential within those first 3-months.
But I am always open to being pleasantly surprised if they do.
With April 15th being the tax deadline in the US, working backwards I knew March & April would be bananas.
And there's no way I will be able to handle the demand myself.
So I needed an employee trained and confident by March 1st. Therefore, they needed to start training in January.
So I initiated the hiring process.
I asked a friend who owns an accounting firm for his opinion about where I should look to hire & what compensation should look like.
Accountants at his firm went through my crypto tax training, so he was familiar with the process my new hire would be executing.
He recommended a talent placement agency which he believed would provide good talent in the budget I set based on November data.
So I engaged the agency.
Their sales experience was less-than-stellar. Including the fact that they overpromised and underdelivered after my payment went through.
And that’s why I had to go level 1 Karen.
I was promised a 2-week lead time to recruit the accountant, and a Jan. 3rd estimated start date for training.
I paid their fee and didn’t hear from anybody.
After 2-weeks I followed up every 3 days with the sales rep.
After 9 more days of silence, I went level 1 Karen and said:
“I was promised that I would already be introduced to my account manager & have applicants by now. Please connect me to my account manager by EOD or you are in breach of the contract [yes, I read it] and I would like a refund.”
Within minutes the sales rep responded with a "dog ate my homework" excuse and connected me to the account manager.
I set up a call that day and the account manager told me,
“We will have candidates for you to interview on the last week of January. And it will take 4-weeks to on board them after you make an offer.”
This meant that I wouldn't be able to start training my new hire until March.
Remember, I needed them to have 3-months of experience under their belt at that point.
And I knew that it would be near impossible to BOTH manage the increased demand AND start training someone new.
My expectation was that I would have an employee ready, trained, and reducing my workload.
The reality was shaping up to be much different.
Instead, I would actually have a parasite sucking my energy at the time of year when I needed it most.
Not acceptable. Cue level 2 Karen.
My response was:
“Sorry NAME but that’s just absolutely not acceptable. I was promised by SALESREPNAME that I would have a fully operational accountant by January 3rd. If this is the lead time for me to get a new hire I am going to request a refund.”
Their response?
”Oh, sorry about that. That isn’t the experience we want people to have. Let me see what I can do.”
One hour later I had two resumes in my inbox.
Only one was decent so I clarified what I was looking for, and my account manager connected me with a better candidate.
I hired them, and now they are set to start January 9th with my internal training process.
So, although I never recommend going full Karen…sometimes level 1 or 2 Karen is necessary in business.
If you don’t advocate for your needs, who will?
I'll keep you updated with how this hiring experience plays out.
Big love,
-Matty Dubs