The Transcript

Carl Smith on Hiring the Best People and Creating a Better Business Story

Jonny Nastor: This is Rainmaker.FM, the digital marketing podcast network. It’s built on the Rainmaker Platform, which empowers you to build your own digital marketing and sales platform. Start your free 14-day trial at HacktheEntrepreneur.com/Rainmaker.

Voiceover: Welcome to Hack the Entrepreneur, the show which reveals the fears, habits, and inner battles behind big name entrepreneurs and those on their way to joining them. Now, here is your host, Jon Nastor.

Jonny Nastor: Welcome back to Hack the Entrepreneur. Have I told you that you’re awesome? Well, you are. Thanks for listening. I’m your host, Jon Nastor, but you can call me Jonny.

My guest today is a speaker, consultant, and entrepreneur, as well as a self-proclaimed deviant hippy that is attempting to maximize his ‘God’ years — don’t worry, you’ll get it once you hear our conversation.

He’s the founder of nGen Works, a digital strategy firm that uses research, technology, and creativity to help their clients stand out online. They’ve recently transitioned from a traditional agency model to a fully distributed team. He is also the co-host of the Friendly Fire podcast.

Now, let’s hack Carl Smith.

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We are back with another episode of Hack the Entrepreneur. Today, we have an extra special guest. Carl, thank you so much for joining me.

Carl Smith: Thank you for having me and for making me extra special.

Jonny Nastor: I didn’t do that. You did that.

Carl Smith: Well, then say my parents did it.

Jonny Nastor: Nice. All right, Carl, let’s jump into this. Carl, as an entrepreneur, what is one thing you do that you feel has been the biggest contributor to your successes so far?

A or B — What’s Your Story? Carl’s Process for Getting It Right

Carl Smith: I always think about things in terms of stories. When I have a difficult decision to make, I’ll ask myself, “What’s the story I can tell if I select A, and what’s the story I can tell if I select B?” It’s not so much about spinning it as it is which one of those stories do I feel better about in my life? I’d say that’s probably been a big part of it, especially the last six years. It’s helped me tremendously.

Jonny Nastor: Nice, so thinking about the stories. Does that mean that where you’re at today you … like chess? You like to think a number of steps ahead and see where that story will lead you and if you like the way that concludes or goes?

Carl Smith: Yeah, absolutely. An example of thinking it through from a story perspective was, we had this amazing opportunity at my company to work with Microsoft. They came in, and they were being demanding, as you might imagine. We were a little guy. They were huge. I talked to the team about it. They wanted to work on it, but they were worried about the client.

As we got closer and closer to it, I finally decided, “Well, I can tell people that we were approached by Microsoft. They were really rude to us. We decided to do it for the money, and we aren’t allowed to show anything or share anything.” Or, I can say, “Hey, we were approached by Microsoft. We told them they could go ahem themselves. I can tell everybody in the world, and they can’t do a damn thing.”

I really enjoyed B, so that’s the way we went. It’s the same with employees, with prospects, with anybody. It’s about making sure that the story at the end is really amicable and nice and that you didn’t give up on yourself to make a dollar.

Jonny Nastor: Smart, and you’re right. It makes a much better story.

Carl Smith: Yeah, I love that story.

Jonny Nastor: One thing because you get to actually tell it, and the other thing because who knows where that could have went?

Carl Smith: Yeah.

Jonny Nastor: I find that if a deal or a partnership, even, is going to start with so many contracts, nondisclosure agreements, and all these promises of, “You can’t tell anybody. You can’t do all this.” — you haven’t even told me anything yet.

Carl Smith: Exactly.

Jonny Nastor: I’ve been in that situation, and I get this bad feeling in my stomach that this is not going to go the way I want it to.

Carl Smith: My lawyer, who’s a really, really good friend now and started off more as a lawyer, I remember him telling me, “Carl, they have nine of me in a room. They’re rabid, and they’re dying to get out. Tread very carefully because I don’t know if I can handle nine Microsoft lawyers.” I went, “Okay.”

Jonny Nastor: Yeah, I know. That would not be a fun story.

Carl Smith: No.

Jonny Nastor: During it, after it, or anything.

Carl Smith: Yeah.

Jonny Nastor: Excellent. Carl, we’re going to go back to the beginning if we can.

Carl Smith: Okay.

Jonny Nastor: There’s this time, it seems, in every entrepreneur’s life when they realize one of two things. Either they have this calling to make something big and make a difference in the world or they simply cannot work for somebody else. Can you please tell me which side of the fence you fall on, and when you started to discover this about yourself?

Why Carl Is Trying to Maximize the ‘God’ Years

Carl Smith: Absolutely. What a great question. My first job out of college, I actually interned at a full-service advertising agency, and I loved that place. Twelve years into it, I got asked to become president of the company, and I told them no. It was one of these things where I had seen what it did to them.

They were there all the time. It didn’t matter — morning, noon, night, weekends. I had a young family. I had one child and another one of the way. It became this realization that if I was going to have any semblance of controlling my life, I had to do something different.

The other thing was I had seen all of these discrepancies and inequalities in the company. I don’t think it was their fault at all. It was the nature of how things started and how they were ran. A lot of times, when you’re running a business, it sucks, but the squeaky wheel gets the grease, right? The people that ask for money, get money. The people who don’t, don’t. Because you’re always scared about money, you don’t always take care of those people who are truly your best people.

I decided to start a new company where everybody was equal. It didn’t work out very well, but the idea was great. Really, that was it. I knew I had the best boss for me, the woman that I worked for, but it was this realization that, “I’ve got to get out of here. I’ve got to be home more.”

The other part of that story that I think is really important is, I had been on the phone with a client at the previous job, and I’d missed the call — I was about an hour late, and it was because I got the city he was in wrong. I thought that he was going to be in LA, but it turned out he was in Chicago.

I asked him about that because remote working and virtual companies wasn’t really a thing. He said, “Well, I’ve got a young kid, so I’ve only got a certain number of God years.” I was like, “God years?” He goes, “Yeah. My kids seems to think I’m a God until he turns 11 or 12. Then I’m going to go straight into my idiot years. When I’m an idiot, I’ll travel, I’ll work in the office, and I’ll do all that stuff, but while I’m a God, I want to be around as much as possible.” So that was the other. He tipped me over the edge, and I was like, “Oh, I’m going to maximize these ‘God’ years, so I’m totally starting a company right now.”

Jonny Nastor: Wow, that’s huge.

Carl Smith: Yeah.

Jonny Nastor: The ‘God years’ — that’s so absolutely true. Do you have two kids still or more?

Carl Smith: No. Still just the two. My oldest, she’ll be 14 in July, and my youngest is 12. There is this weird middle ground for me. The eye rolls happen, but not until their heads turn. I can kind of ignore it and act like I’m a God, but honestly, I’m a pretty cool dad now. I’m hardly a God, and I’m not quite an idiot.

Jonny Nastor: Yeah. They’re going to stop turning their heads soon, though, aren’t they?

Carl Smith: Yeah. There’s going to start letting me know any minute now.

Jonny Nastor: It’s terrible. You said you created a company where you wanted to make everyone equal?

What Happened While Creating a Company Where Everyone Was Equal

Carl Smith: Yeah. When I was at the full-service agency, hell, I was making about $135,000 a year, and I was 28, 29.

Jonny Nastor: And you quit?!

Carl Smith: I did.

Jonny Nastor: I love it. That’s awesome.

Carl Smith: I jumped out of a corner office, man. One of the people that came over to the new company with me, he was only making about $50,000. He was a chef, and I was a server. It blew my mind when we were talking about it, because employees always talk. As an owner, you have to embrace that. I actually got to salary transparency, which is whole other show. You can just throw people in a pit with a knife and see what happens if you want. That’s how much fun that is.

I wanted us to be on equal footing. We had this concept of time equity, but that fell apart. There were four of us who started off as equal owners. One of them could create five amazing things one day, and the other one needed five days to create one amazing thing. We’re all created equal. But over time, we make different choices until some of us are truly stellar, and others are doing their best. It becomes really, really difficult to maintain that sense of equality once it starts to show itself — who’s got value on the company.

Jonny Nastor: Yeah. Four equal owners, meaning you had three partners, right?

Carl Smith: I did.

Jonny Nastor: Then you went without partners. Now — you told me right before this call — you’ve gone back to having a partner recently.

Carl Smith: That’s right. With the four, we had a series of rules since we were all not in charge or in charge. I like the idea of not having a boss.

Jonny Nastor: Of course.

Carl Smith: Those rules wiped out two of them. If you had three strikes in a year, you were gone. That was pretty painful. Then the others wanted off and to do other things. That was cool. It was amicable. I bought the company from them, and it worked out really well. I had about six years almost of running the company. A year and half, two years ago, I took about nine months off because the company was running itself. We had an opt-in model, autonomy, Daniel Pink, and all that stuff. It was working really well, and it fell apart really quick. When it fell apart, I got pulled back in.

I didn’t know what I was going to do, Jon. I was sitting there looking at it. I had started two other companies, and I was like, “I love nGen Works. It’s my baby. It’s the first thing I ever did.” It was just an organic happening that I met Ben Jordan, who is the Creative Director and Head of Customer Experience at a company called Envision who makes a prototyping tool. We started talking, and he said he was going to start his own shop. I said, “You want a 12-year head start?” And he came on. Right now, it’s pretty cool. We have completely opposite, yet matching skill sets. It’ll be fun to see where it goes.

Jonny Nastor: Nice. Did you say in there at some point, “autonomy, Daniel Pink, and all that?”

Carl Smith: Yes.

Jonny Nastor: What does that mean, exactly? I just saw Daniel Pink last week, if we’re talking about the same Daniel Pink.

Carl Smith: We probably are. Daniel Pink who wrote the book Drive.

Jonny Nastor: Yes!

Learning to Hire and Keep the Best People

Carl Smith: Yeah. I had him on my podcast actually, and it was the biggest fanboy moment. It’s the only time that I’ve listened to myself, and I totally hated it. He wrote Drive. It’s a lot of research, actually, from the ’60s all around autonomy and mastering a purpose. I had read this book, and I’d gotten the opportunity to talk with Daniel, which was amazing. It was the beginning of the year in 2013, and I asked everybody in the company pretty much two questions.

The first questions was, “If you could do anything you wanted, time and money didn’t matter, what would it be?” The second question was, “Is there a way to do that, that benefits the company?” We actually changed the company based on this. We launched a new service for one of the people who had been there for a long time. She had this great skill that everybody loved, so we made that its own service. It’s a quality assurance service.

Then, for other people, we had people who wanted to change jobs, but we were a small shop. They asked, “Could I try some different things?” It ended up being the two most successful years of the company. It was pretty amazing.

My job became more of a community manager versus an owner or a boss. I was never a good boss, but I was pretty good at chemistry and figuring out who could work together, helping to resolve conflict, and that sort of thing.

Jonny Nastor: Yeah. That’s hard. It’s hard being a boss, sometimes.

Carl Smith: It’s so difficult. Especially, because if you’re doing a good job, you’re hiring people that are tremendously smarter and more skilled than you. I was a theater major for God’s sake, right? I don’t have any clue about running a business. I didn’t take any business classes. I’ve read a tremendous number of books just because I was terrified. I probably have some level of knowledge now, although impostor syndrome...