Automation - delegation

Key Insight

Automation - delegation

● This is one of the most important lessons in the course. Read carefully. The most effectively done work is the one we do with 0 effort. How is that possible? We can automate the work, and we can delegate the work.

● “That’s 2 minutes”... a sentence that makes my hair stand on end. Almost never is it just “2 minutes,” and even if it were, context switching is costly, and adding another worry is even more costly. The brain should work only on high-value tasks and nothing else. Developing a business is an extremely hard job with lots of worries. One more worry is not needed, and your job is to protect your brain at all costs.

● When to delegate? The math is very simple:

○ Calculate how much your work hour costs: If you expect your company to be worth 1,000,000 euros in 5 years, that means that your work hour is 1,000,000/(5 years * 250 days * 8 hours) = 125 euros (Help with 10 or with 100 if you expect more). If you work as a programmer for 50 euros per hour, then it’s 50 euros. If you work as an auto mechanic for 20 euros per hour then it’s 20 euros.

○ Anything you do that produces less than 125 euros of value per hour you should essentially delegate. How do we know they produce less than 125? We can find someone to do that job for less than 125 euros per hour. Economics is simple. Give someone to finish the job for an hour for 10 euros, and I go away and do what I do best and earn 125 euros, give them 10, and I keep 115 euros. Very simple but people simply don’t think about this, and the Balkan mindset says: why would I give him money when I know how to do it...

○ Maybe the business is in an early phase and current finances don’t allow it, but once you shift revenues to 2-3 thousand euros per month this becomes easily feasible, at least in Balkan countries where the hourly rate is still cheap.

○ If you have significant income and profitable businesses, 100% of all tasks you can delegate should be delegated. Your job is deep thinking and strategy. If you are here it means you are on an entrepreneurial path and this calculation definitely applies to you.

○ Popular wisdom is that people who delegate everything are lazy, but that wisdom mostly comes from people who are financially unsuccessful and will likely stay that way.

● What tasks do we often perform that produce far less value than 125 euros per hour?

○ Household maintenance and routines. Ironing, washing, dishes, shopping, preparing things for work/training, all the repetitive tasks. No thinking required, and with the first income this should be delegated 100%.

■ I often hear that these things relax me – spa relaxes you, massages relax you, looking at the sea relaxes you, walking in nature relaxes you. You do this because you want to save money...

■ Time savings and also reducing context switching. Do you really think a successful entrepreneur thinks about laundry powder?

■ If finances still don’t allow doing all this grouped at once, ideally in the evening (but delegate as soon as possible).

■■ If you have a wife or husband who is a homemaker and doesn’t work, it’s fine that they do these tasks, but it must be their responsibility 100%.

● If your partner has no obligations and you have a lot it can cause many problems in the relationship. Ideally partners have similar level of obligations during the day. (Wise strategy is sometimes to artificially create some obligations).

○ Vehicles - Washing, maintenance, fuel, tolls, tires... This is a big time cost annually, and easily can be delegated to a student (female student). Once every two weeks they can take the car and return it after a few hours fully cleaned. Electronic tolls are mandatory etc., and you can pay large sums in advance and forget about it for years (I last paid in 2022). Here it would actually be most effective not to own a vehicle and use ride services as needed, but if you have kids or travel outside the city it’s impractical.

○ Cooking - Private chef is the best variant, but quite expensive. A good alternative is to have a cook in the office and cook meals; or hire a cleaner to prepare meals. The next best alternative is to order all meals in advance from some companies that do it. Once a week we sit and order for the whole week (Saturday and Sunday) and don’t think about it. It can get boring after a while, but yields significant time savings, and we can order healthy meals; when they arrive there is no going back, sunk cost will help us eat them. The recommendation is to order all meals for all days, and even if we sometimes eat at restaurants, the extra meal is thrown away, and that is suboptimal, but guessing when we need a meal and when not is even more suboptimal (I know your parents taught you not to waste food, and mine did too, but you must understand that parents aren’t always right, and if they want what’s best for you).

○ Various small tasks - Similar to cars; can be delegated to a student (female student). Planning trips, administration, errands, print, buy, order, receive, etc. All this can be delegated easily and cheaply.

○ These four examples with very small investment can boost your effectiveness by 200-400%.

● Automation - A highly effective alternative to delegation. Ideally we’ll delegate to someone and they’ll automate, but if we can’t afford delegation, automation is a great solution. It’s very rare that investment in automation isn’t worth it, and if you need to spend an hour or two to solve a problem for the next X years, that’s a good move. Again we save both time and context switching. What can be automated?

○ Payments - e-banking standing orders are top-notch and solve the problem elegantly.

○ Administration - Zapier can easily do complex automations that involve multiple steps and applications.

○ Small bills - Paying a bill a year in advance. If it’s infostan 1000 dinars pay it 12 months ahead and finish with it, or electronic tolls can be paid 40,000 and forget about it for years (I last paid in 2022).

○ Smart switches, outlets, heaters, lights, garages... The time now is very cheap for automation. Xiaomi literally has all devices at an incredibly low price. Everywhere we gain seconds and minutes, but when added up over the long term it really accrues.

■ Automatic garage costs 500 euros? If we save 2 minutes twice a day and our hourly rate is 125 euros, how worthwhile is it?

○ Scheduling in advance - not exactly automation, but we can operate on automation. Pruning, body maintenance (nails, beard, massage, sauna etc.), socializing / family (e.g., pre-scheduled lunch every 4 weeks), ordering meals...

● We listed some examples, but of course we cannot list everything. You need to develop awareness of what you are doing and consistently have a background process that asks: Do I really need to do this myself? Can I delegate this or automate it?