Dan Martell - The Only 5 Skills You Need to Build a $1B Company

00:00:00.000 Ever wonder how these 20-year-old tech CEOs

00:00:02.160 can build billion-dollar companies?

00:00:04.120 After selling my first company for millions in 2008,

00:00:06.880 I moved to San Francisco to find out.

00:00:08.720 And I met a guy named Naval Ravikant

00:00:10.400 who introduced me to the four Cs of leverage.

00:00:13.080 And since then, I've added a fifth C.

00:00:15.380 See, time multiplied by leverage equals output.

00:00:19.060 So without more explanation,

00:00:20.620 these are the five Cs to get more leverage.

00:00:22.940 Starting with the first C, content.

00:00:25.660 Content is systems.

00:00:27.700 Content is process.

00:00:28.880 It's checklist.

00:00:30.000 and systems in a business stand for save yourself time, energy, and money. Think about it. I can

00:00:36.740 spend 20 minutes creating a training video that could be seen by millions of people that I've

00:00:41.640 trained up. Even my bestselling book, Buy Back Your Time, took me two years to write. Now it

00:00:46.000 gets read by thousands of people and it takes me no extra time. Every billion dollar company has

00:00:51.680 the way document. They have a way of operating their business that they've written down,

00:00:56.940 they've documented, they create content around it. And that is how they're able to grow and scale.

00:01:01.620 That's how they create massive amounts of leverage. So to build a billion dollar business,

00:01:05.060 you need playbooks. So this breaks down my camcorder method for you to create playbooks

00:01:09.880 very easily. Step one is create an outline. Ask yourself, what would a 10 out of 10 outcome be for

00:01:15.800 this piece of work I want somebody else to follow? What's the criteria? Collect all the information

00:01:19.960 you have. Decide what would be good and bad examples of that work being done. Write down

00:01:24.400 the five principles that you believe you've adopted to create this work. Put that in one

00:01:29.580 outline to help you navigate yourself to creating the playbook. Number two is record. And I use

00:01:35.220 everything to record. I record on my iPad using the screen record. I use Zoom all the time by

00:01:40.100 myself on a call. You can literally just use your iPhone camera and record yourself. But the idea is

00:01:45.440 to record yourself following the outline and talk out loud what you're doing. You have to say to the

00:01:51.440 camera to the person that might be watching the recording why you're doing what you're doing and

00:01:55.680 why you do it in that order so that they can learn from your example number three is you got to

00:02:00.380 create it now you take the training the recording the outline and you can sit down and you can write

00:02:06.200 out the playbook you can transcribe it and actually take the transcription give it to ai and ai will

00:02:11.760 write it for you step by step it is beautiful and it creates a piece of content that is now

00:02:17.760 repeatable that you can get massive leverage from number four is testing this is where you give your

00:02:22.560 playbook to somebody else to follow to see if it makes sense if they get tripped up if they actually

00:02:27.360 complete all the tasks if you don't test it first and you give it out to the wild then you will have

00:02:32.000 inconsistent outcomes from that playbook number five is feedback and this is one of my favorite

00:02:37.120 things to incorporate into your playbook is once people have been using it you can do some q a and

00:02:43.040 answer questions for them and those questions become feedback for you to change the document

00:02:47.760 and or add an faq frequently asked questions section in the document that makes the whole

00:02:52.880 thing just really land for new people so a playbook is a complete process for how you teach

00:02:57.520 train somebody how to get something done but the difference between a playbook and a checklist is

00:03:01.760 actually quite dramatic playbooks are for training people checklists are for doing things think about

00:03:06.880 it there's a checklist when you're about to take off as a pilot that you follow that is not making

00:03:11.520 up for the fact that you have to go learn how to be a pilot. There's this great book called

00:03:15.680 The Checklist Manifesto, and the author does an incredible job breaking into these four specific

00:03:20.000 parts. For example, I was visiting my friend's restaurant the other day, and they have this red

00:03:24.100 light that goes off every hour. And when that light goes off, somebody has to go check all the

00:03:29.660 different product in the station to make sure it's clean, it's been turned over, and there's no

00:03:33.680 issues. He uses a checklist manifesto in that. So step one is a pause point. Where in the process

00:03:39.620 do you need to insert a checklist

00:03:41.500 to make sure that it removes any defects?

00:03:43.880 So he was finding issues with the food

00:03:45.780 not being properly heated.

00:03:47.680 So he added this pause point every 60 minutes,

00:03:50.120 that red light goes off, tells the whole staff,

00:03:51.760 somebody go check it.

00:03:52.600 And they actually manually turn the light off

00:03:54.740 to signal to everybody it's been done.

00:03:56.980 Two is it needs to be speedy,

00:03:58.780 meaning that checklist has to be less than 60 seconds

00:04:01.220 to execute.

00:04:01.820 So it can't have more than five to nine items on it

00:04:04.520 that they go through.

00:04:05.740 Three is it has to be supplemental knowledge,

00:04:08.220 not a complete playbook.

00:04:10.360 When the pilot's checking the air pressure in the tires

00:04:13.100 before he takes off, that's a quick glance

00:04:15.640 and it's a checklist.

00:04:16.860 It's not teaching them how to check the air pressure.

00:04:18.940 Number four is you have to test and update it.

00:04:21.060 You have to put it into practice, see if it works,

00:04:23.540 does it resolve the issue and update it

00:04:25.820 or add stuff to the checklist

00:04:27.080 to make sure that people are properly following the process.

00:04:29.960 Most people have a hard time delegating and let it go

00:04:32.640 because they're worried that somebody's gonna make a mistake

00:04:34.960 that's gonna cost them a lot of money or embarrass them.

00:04:37.160 But the way I overcome that is in a department, I implement sensors.

00:04:40.960 Sensors is the idea of measuring the outcome from that process so that if there's a defect,

00:04:46.440 I get notified.

00:04:47.420 So for example, in my basement, in my home, there's a water sensor.

00:04:50.620 If for whatever reason, while I'm traveling, something happens and water leaks in my basement,

00:04:55.080 it turns off all the water in the house.

00:04:57.280 Same thing if I have a sensor in my marketing funnel or my sales process, or even amongst

00:05:02.120 my employees where I might send a survey every 90 days, asking them a question that gives

00:05:06.320 me a feedback loop, letting me know if the culture is still good. Those sensors have to

00:05:10.540 be in place. Billion dollar companies have sensors in place to allow the CEO to pull themselves out

00:05:16.880 of being involved in every department, but still feel confident that it's running right. So here's

00:05:21.620 the thing. Now that you understand content, this next C could transform your business. But before

00:05:26.360 we move into the second C, we've got a goal of hitting a million subscribers. So if you haven't

00:05:30.520 already, click subscribe. It takes just a second. Which brings us to the second C, code. Code is

00:05:36.400 software. Code is AI. Code is automation. See, at Martel Media, we believe that having tooling to

00:05:43.140 help our different departments is the only way to scale. I don't want to have hundreds of people

00:05:47.720 that do the work that 12 could do with the right software. So we leverage software and AI custom

00:05:53.320 built for our different departments to allow them to be more productive. And if you're scared of AI,

00:05:57.820 just understand this ai won't replace you but someone using it will so at all billion dollar

00:06:03.980 companies they've built on the back end of automation they've built on the processes of

00:06:09.500 workflow they've looked at opportunities to increase their throughput by using technology

00:06:14.780 or code if you don't it's impossible for you to be able to scale with today's information systems

00:06:21.100 and best practice software you can hit the ground running and build a massive business naval used to

00:06:27.260 to say this back in the day, he sees a hundred person company generating a billion dollars in

00:06:32.380 profit. The only way to do that is have massive amounts of leverage using software. The most

00:06:38.140 powerful software that you could adopt is AI. And that's why I created this thing called the AI

00:06:42.900 amplifier for you to understand how to integrate it into your life. Number one is you got to connect

00:06:47.700 to a trigger. See, most people know that there's AI out there, but they don't use it. So how do we

00:06:52.140 connect that to a trigger of something you already do right now? I would encourage you to replace

00:06:55.840 your default browser to open up to an AI app,

00:06:59.160 not to Google or whatever you use for search.

00:07:01.400 The other thing you can do is connect your morning routine

00:07:04.300 to a trigger to force yourself to use the AI app.

00:07:07.800 So for me, every time I sit in my chair,

00:07:09.500 I open it up and I try to do three prompts.

00:07:11.700 That way it gets built into my muscle memory

00:07:14.280 of using it on a daily basis.

00:07:16.740 Number two is you wanna integrate it to workflow.

00:07:18.880 Think about the things you're currently doing.

00:07:20.800 You can automate that, integrate it to your email,

00:07:23.440 integrate it to your marketing system,

00:07:24.740 integrated to your billing system.

00:07:26.420 With Zapier and other automation tools

00:07:28.320 and the AI APIs, the way they're connected,

00:07:31.460 you can automate those workflows.

00:07:33.460 So it's just happening behind the scenes all the time.

00:07:35.840 Number three is you wanna make it your own.

00:07:37.660 You wanna understand the language that AI talks.

00:07:40.680 So it talks in prompts, it talks in libraries,

00:07:44.060 it talks in projects, but you gotta make it your own.

00:07:46.700 You gotta integrate it into your life

00:07:48.440 and be able to use it in a way

00:07:49.900 that nobody else even understands.

00:07:51.480 The reason why companies

00:07:52.880 that generate billions of revenues

00:07:54.560 use code is because every department has a best practice and when you buy software to run that

00:08:00.820 department it doesn't matter if it's marketing or sales you get those best practices with you

00:08:05.460 you get the language the terminology the workflows but coding content alone won't get you to a billion

00:08:11.520 without this next c which brings us to the third c capital when i started my second company after

00:08:17.120 moving to san francisco we needed capital to scale we got to ramen profitable but we were going after

00:08:22.620 a massive market. We wanted to build a hundred million dollar company in seven years, and that

00:08:27.460 was going to require deploying capital at a pace that neither my co-founder or I had ever done

00:08:32.680 before. Now, I don't believe that it takes money to make money. I think it takes resourcefulness.

00:08:38.020 I think it takes creativity. I think it takes you trying to figure out who's got your money and how

00:08:43.160 do you create an offer that they want to then participate in. So I've broken it down to four

00:08:48.440 ways to get capital so that you don't have to be at mercy of not having the money to actually scale

00:08:53.480 number one is borrowing and borrowing may sound simple and kind of basic but it kind of is you

00:08:58.520 have banks you have revenue based financing you can borrow money from other people if you have

00:09:03.560 a business model that's scaling and you need to borrow money borrowing is a real option number

00:09:08.120 two is funding and funding is where people give you money to buy equity in the business usually

00:09:13.240 that's angel investors venture capitalists private equity firms they're giving you capital to get a

00:09:18.360 piece of the business that's what equity means number three is partners this to me is like the

00:09:23.440 sweat equity side of it where you have co-founders you have people that are the opposite skills

00:09:28.600 and they're coming into your business and their capital is time and sweat capital this is them

00:09:34.240 putting their own time and energy that normally you'd have to pay for because you have partners

00:09:38.540 they're giving you either access to distribution or specialized knowledge advice and that advice

00:09:43.880 instead of paying for it you get it for free through those partnerships and number four is

00:09:47.660 customer financing easily my favorite way to finance a business by pre-selling what you're

00:09:54.000 about to build to customers to build the business off their capital the coolest part about this is

00:09:59.780 you don't have to give up any piece of your business to grow and if you do it right the

00:10:04.060 more customers you get the more cash flow you'll have to be able to invest in growth but all of

00:10:08.260 these frameworks don't mean anything without the next c which brings us to the fourth c

00:10:12.360 collaboration business would be easy if it wasn't for people and i love saying that because it

00:10:18.460 reminds me that the better i get at the fourth c collaboration collaborating with other people

00:10:23.460 the more the opportunities come to me if i want to build a billion dollar business i need to learn

00:10:28.480 how to attract develop retain top talent every specialist out there doctors lawyers social media

00:10:35.900 experts real estate agents if they don't learn to play nice with other people they usually get stuck

00:10:40.280 at about $300,000 per year

00:10:41.960 because they don't learn to delegate.

00:10:43.920 And if I've learned anything,

00:10:45.080 your company will only scale

00:10:46.600 to the level of your ability

00:10:47.920 to work through people.

00:10:49.520 Billion dollar companies

00:10:50.580 were not built off $10 tasks.

00:10:52.480 They weren't even built off $100 tasks

00:10:54.140 and honestly not even $1,000 tasks.

00:10:56.120 When you scale,

00:10:57.200 you have to be willing to trade money

00:10:59.220 or capital to hire talent.

00:11:01.920 You need to be able to pay

00:11:03.100 to have people find that talent.

00:11:05.320 Your job is to get on a phone call

00:11:07.060 with somebody that's capable,

00:11:08.200 that's already working somewhere else

00:11:09.400 and convince them to give that up to come join you.

00:11:12.640 The thing about these 20-year-old tech CEOs

00:11:14.780 in Silicon Valley,

00:11:15.800 what they understand that most people don't

00:11:17.560 is they understand how to buy back their time,

00:11:19.680 how to get leverage with the money they've raised

00:11:22.300 to be able to do more.

00:11:23.800 They know that anything that isn't talking to customers,

00:11:26.660 getting them to buy,

00:11:27.720 innovation, working with the product team,

00:11:29.800 all the other stuff is just distractions

00:11:31.860 that's keeping them from doing the thing

00:11:33.480 that only they can do.

00:11:34.800 Learning to work with people.

00:11:36.640 The way I think about it is we build the people

00:11:39.020 and the people build the business.

00:11:40.940 The CEO needs to be focused on doing that.

00:11:43.620 If you want to be a billionaire,

00:11:45.300 build a billion dollar company,

00:11:46.900 then you gotta learn to let go

00:11:48.580 and give up things that you actually might enjoy

00:11:51.240 to create the space to go learn

00:11:53.020 to solve the bigger problem

00:11:54.580 that needs to be solved for the business

00:11:56.660 and for you to get to that next level.

00:11:58.560 That's why I created the replacement ladder.

00:12:00.000 It's a undisputable sequencing of hiring

00:12:03.260 in the right order

00:12:04.460 that gets you the most amount of time bought

00:12:06.800 for the least amount of money spent.

00:12:09.020 so level one is an administrative assistant because if you don't have this you're probably

00:12:13.100 feeling stuck now the key though is to have them manage a hundred percent of your inbox

00:12:17.740 in calendar if you do that right then your inbox is actually there to do and then managing your

00:12:23.740 calendar keeps your mind free for solving big problems if you want my complete playbook for

00:12:29.100 managing my executive assistant just find me on instagram dan martell i'm verified that's me and

00:12:34.220 and message me the word YouTube EA,

00:12:36.520 and I'll send you the direct link

00:12:37.840 to my complete playbook for free.

00:12:39.520 Level two is delivery,

00:12:41.100 and this is where you might be feeling stalled right now,

00:12:43.160 but if you sell something to somebody,

00:12:44.820 you need somebody else to support you to onboard them

00:12:47.500 and to support them.

00:12:48.660 You might still be doing the work,

00:12:49.940 but having somebody else manage the account

00:12:52.600 and the conversation is the second level

00:12:54.600 that will unlock a lot of leverage for you.

00:12:56.720 Level three is marketing,

00:12:57.860 and you might be feeling friction in your growth

00:12:59.900 because every time you grow, you do a little marketing,

00:13:02.000 then you stop and the business slows down.

00:13:03.700 what you want is somebody wakes up every day focus on two things one is campaigns are people

00:13:09.140 monitoring the timing the product what needs to be sold what's the creative angles those are the

00:13:13.860 campaigns and then also traffic are you getting eyeballs on your website on your ads if somebody

00:13:18.820 wakes up every day to be creative about the marketing campaigns and also drive traffic to

00:13:23.380 your website that's how you build a great marketing system level four is sales and i call this the

00:13:28.980 freedom level because at this level you can actually go on vacation and come back and make

00:13:34.100 more money because somebody else created the awareness you existed somebody else had the

00:13:38.180 conversation with that buyer and sold them and then somebody else brought them into your world

00:13:42.500 took payment and onboarded them waiting for you to get back the key for sales is somebody to own

00:13:47.300 the calls and the follow-up if you're still involved in the calls or doing follow-up it's

00:13:52.100 not a good scenario give it to somebody else so you can create some freedom in your business and

00:13:56.020 grow level five is leadership and this is where you start to feel flow the key though is higher

00:14:01.780 leaders that can do these two things one design the strategy to win and two own the outcomes if

00:14:07.780 you're showing up to fix problems because they're not accountable or you're telling them what to do

00:14:11.780 because they don't have the strategy then the whole thing falls apart and you don't truly have

00:14:15.700 leadership and flow that replacement ladder and that sequence is how billionaires go from zero

00:14:21.140 to hero as fast as freaking possible building their businesses and then teach it for their

00:14:25.940 team members below them so they also get leverage because that can multiply those are the four c's 0.99

00:14:31.460 that naval taught me but the next c is the most important thing that people overlook when building

00:14:36.980 a billion dollar company which brings us to the fifth c culture recently i visited first form hq

00:14:44.020 a guy named andy for sale is the ceo and founder and first form sells nutritional products but what

00:14:50.100 What they actually have created is a culture of winners,

00:14:53.980 a culture of warriors,

00:14:55.500 a culture of people that have standards,

00:14:58.520 not that they're asked to follow standards,

00:15:00.860 that it's ingrained in who they are.

00:15:03.020 They celebrate those kinds of people.

00:15:04.920 And what I've discovered, having built several businesses,

00:15:08.460 being involved in developing teams,

00:15:10.140 is that the environment is more important

00:15:13.360 than the rest of it.

00:15:14.420 If you don't create an environment

00:15:16.300 that attracts top talent, retains top talent,

00:15:20.100 develops top talent makes your life fun to go to work if you don't have that place without culture

00:15:26.100 you don't have leverage see culture isn't what you tell people it is culture is what people do

00:15:30.740 when no one's looking and this is a hard one especially if you're a first time ceo because

00:15:34.980 you're gonna want to involve everybody else in the decisions and try to co-create with them and

00:15:39.620 create this inclusive business where everybody's welcome but the truth is at the end of the day

00:15:44.420 when you win and you will win you'll be the only one that's guaranteed to be there and if you change

00:15:49.460 your culture for other people that aren't even top performers, then you're going to wake up and

00:15:54.000 come to work someday and not enjoy the place you see. I heard this from Peter Drucker a long time

00:15:58.540 ago. Culture eats strategy for breakfast. A lot of people think they have the right sequencing,

00:16:03.420 the right strategy. The execution of a team is everything. And your standards for how the team

00:16:09.200 acts and the culture you want to create isn't what you say it is. It's what you accept. It's

00:16:14.340 what you reward. It's what you fight against. If somebody doesn't step up and you don't remove

00:16:21.120 them from your team, then you've communicated silently your actual standard, not what you say

00:16:26.640 it is. The only way to do great work is to love the people you do it with. Work is a creative

00:16:32.040 process. It's an energetic process to build these billion dollar companies. It requires a level of

00:16:37.580 admiration of the people you work with to push back, to have that trust, to build something

00:16:42.980 that's never been built before.

00:16:44.160 Right now in the market,

00:16:45.780 there are a lot of managers

00:16:46.880 that have been managing these software companies

00:16:48.760 and they lost their soul.

00:16:50.020 And the founders like Airbnb

00:16:51.700 have to step back in to rebuild the culture

00:16:55.520 because it's not about a checklist.

00:16:57.500 It's not about the code.

00:16:58.540 It's not about the content.

00:16:59.660 It's not about the collaboration.

00:17:00.780 It's not about the other four Cs.

00:17:02.100 It's the soul of the business.

00:17:04.520 And that's what builds billion dollar companies.

00:17:06.600 That's why Mark Zuckerberg is still the CEO of Facebook

00:17:09.160 and they continue to compete

00:17:10.560 in one of the most aggressive competitive markets

00:17:13.720 out there, social marketing, social media platforms.

00:17:16.600 They are being attacked from all sides

00:17:18.280 and the founder has designed a culture

00:17:20.660 of people that want to win

00:17:22.060 because he's leading the front.

00:17:23.500 If you want to learn how to build a business

00:17:25.100 that runs itself, click here

00:17:26.640 and I'll see you on the other side.

Dan Martell - January 31, 2025

The Only 5 Skills You Need to Build a $1B Company

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