the outsource code Interview with Russell Brunson Okay, guys. Thanks again for joining us. This is The Outsource Code. And this is our first call with our guest. And we re happy to have today Russell Brunson. Russell is the owner of www.thesecondtier.com, which is actually the largest affiliate training center online. And what s different between Russell s affiliates and others? His tens of thousands of affiliates are actually making money every month. While most people hope and dream for super affiliates, Russell decided instead to develop and train his own and his affiliates are currently earning hundreds of thousands of dollars in sales each year. Hey, that sounds like something we all want here. Russell is just an amazing outsourcer. He is actually the people we go to when we ask advice for outsourcing. He s just done some tremendous things that he s done, starting with his background from a college wrestler and now into this mega Internet marketing empire. Right, Russell? So he ll be sharing with us his tips and tactics on how to better outsource. So without further ado, Russell, thanks for joining us on the call. Anti-fluff introduction. I appreciate that. Howie, you ve got some questions you want to get started and start going with? Sure. First off, Russell, thanks again for calling in. I wanted to see if you can expand a little bit more on your introduction and talk a little bit more about how you got into Internet marketing and describe a little bit more about what your current business and operations look like. You know, number of employees, offices, things like that so we get sort of a feel for how you ve grown and the scale of the current operations. Okay. I started this business probably about four years ago now. And like Mike said, I was wrestling at my university. I was wrestling here at Boise State University, actually. And after my first year of wrestling here, I met a girl and I decided I wanted to marry her, so I went and proposed to her and we got married. About the time we got married, I realized that I didn t have any money. She wasn t making too much money, and so obviously there was a problem there. And I wanted to continue wrestling, but the way the NCAA works is you can t have any kind of job, and even if I could have a job, there was no time whatsoever in between wrestling and classes and a new wife to go and get a job.
the outsource code page 2 So I was trying to figure out a way to make some money, and actually there was this local seminar. I got a flyer in the mail or something about it, so I went to this seminar and they talked about Internet marketing and they sold me a Web site for $5,000, a merchant account for $6,000 and then hosting for $80 a month. And I was like $10,000 into this business. I was all excited I was going to make a bunch of money. I went back home and I searched on Google and found out that hosting is about $5 a month. You can get people to design your Web sites for a lot less and that PayPal is free. So I called them back up and cancelled it all real quick, but that s how I kind of got into it and kind of started saying, okay, I ve got to figure out how to make this whole business thing work. I just tried to start playing with it and try to figure it out between wrestling practice and doing homework during the hour or two a day I had. And actually, with an hour to two hours a day, I was able to build a business that was making high six figures a year while I was obviously going to school and wrestling. Mostly that was because I got good outsourcing because I obviously didn t have time to do any of the work myself. So I found other people who were willing and able to do that for me. Now Russell, when I was in college, I think I was able to make $100 a week or something like that. You just said you made hundreds of thousands of dollars a year? Yeah, it was kind of a funny story, actually. Like I would sit there in my classes and look at my teachers. And I got a C in my marketing class. I remember sitting there listening-- A C in marketing? --and I said you just gave me a C. I m like I made more money this semester than you ll probably make in the next five years. And it was just kind of a funny thing. Actually, by the end of my college -- and don t ever tell my teachers this -- but I got to the point where I actually started outsourcing a lot of my homework and projects, also. Uh-oh. Now that s the outsourcing class that everyone needs. Yeah. Maybe we should sell this as a college course. No, I m just joking. I didn t really do that. Now, do people like -- I m just curious. Did you tell your classmates and stuff like this, or you just kind of kept it hush-hush.
the outsource code page 3 Some of them knew. Some of them -- I didn t go out of my way to tell a lot of them. Actually, it was kind of funny. One of my last weeks in college right before I graduated, I did a presentation in one of my classes. And no one in that class had any idea. We were all business majors and computer majors and stuff, so I just did this little presentation about a Web site I had launched and I think we made like $16,000 in the first three days. And the presentation was on day three when I gave that presentation. And everyone was just blown away. And the funny thing is that the teacher asked if anyone had any questions, and this one kid raised his hand. He was like that just seems like too much work. I was like, oh, you have no idea. You ll be working for the rest of your life and I had three or four people do this work for me. Anyway, that s kind of how college fit in with--. And you just graduated, right? It s actually been about a year now. About a year. So, yeah, it s been a year. And you graduated with -- you know, you probably were able to very easily pay off all your college bills. Oh, yeah, I didn t -- they were paid off before we ever got into -- I had wrestling scholarships, too, which helped, obviously. But the rest of it we paid off pretty quick just through the business. But since then, as I said, I graduated a year ago. Since we graduated, I ve brought on six employees, full-time employees who are working here for us. And that s actually I think what will be different between my call and a lot of the other calls you re doing is the fact that I moved a lot of my outsourcing from finding people in other countries and stuff to actually finding people here to work in my office and outsourcing things that way. The shift in our business has been just awesome so far. But yeah, as I said, we ve got six employees now. We re currently in an office that s about 1,500 square feet and in a week and a half, we re moving into our new office which is about 2,000 square feet. It s got a whole video recording studio and all sorts of stuff. So it s going to be a lot of fun. Now can you talk a little bit more maybe going back a few years when you started with your own Web site? And you put it up online and you realized that you can refund this course that you mentioned that was $5,000 or $6,000 to get all this basic Web stuff. And you had your own site running, you had your own merchant account and you started doing some sales. What was the point where you realized that I need to get some help, I need to get some outsource relationships?
the outsource code page 4 And how did you take that first step from not having a lot of Internet experience, you know, going to college full-time, building a site making a little money and then saying, okay, I need to hire someone to help me and then take this to the next level. Because that s a pretty big leap if, you know, you kind of glossed over it and you made it sound really easy. But if we focus on that for a second, that was actually a very big leap. Yeah, definitely. In fact, like you said, it s a leap of faith a lot of times. Like when I first got started, my wife was making about $1,100 a month. And so that was our sole income. That was 100% of everything. That barely covered our mortgage and we didn t even have enough to cover groceries. But with that, my first project I outsourced because I didn t know how to do the work. I had tried affiliate marketing and I tried some things like that and I couldn t do it at first. And so finally one day I had this idea for a product. And the product, if you want to see it now, it s www.zipbrander.com. What happened is I was sitting there and I kept buying resell rights to all these people s products. And I was like, man, I wish there was a way -- well, first let me step back. The problem with resell rights is inside all these products is there are links to other people s Web sites, right? The more of them I sell, the more free advertising I m giving to all these other people. And I remember sitting there one night saying, man, I wish there was a way I could brand this file with my ad first. Someone opens it and they see my ad, then they can go read the e-book, because then they could open the software program. I thought that and I said, man, that would be a cool product. So the first thing I did was I tried to figure out how to create a product, and my major is computer information systems. So you would think I would know how to program, but anyway, I tried to figure out just the basics and pretty quickly I realized there was no way I was going to be able to figure out how to program this thing. It s going to take forever. The first thing I did was I went to Google and I typed in hire a programmer and I found some sites in Google ads on the side. And I went there and I told them my project. And they came back and they told me it would be $6,000 to create the brander. And I was like, oh, just devastated. Like, well, there goes that great idea right there. So I kind of gave up on it for about a month or so. And then I was in some forum and someone mentioned a couple of just project Web sites, like www.scriptlance.com and www.guru.com and www.elance.com and some of these sites and said, hey, this is where I go to get all my work done for me. I was like, huh, that s interesting.
the outsource code page 5 So I think I went to Rent-a-Coder first, actually. I went there and I posted the exact same project. I said, look, I had this other company who told me it would be $6,000, I posted it there and some guy came and he said, you know, for what you re looking for, it would be really expensive. But if you would make this one simple change right here, he said I could do that for about $20. I said you could create the whole program for $20? He was like yeah. I was like all right. So I gave him the $20. Obviously it wasn t much money. He created a program and a week later sent me back a copy of it and it was awesome. It was better than I had hoped for. And then he was like, well, can I have a bonus for making it so good? So I ended up giving him $100 bonus. It cost me $120 and I had Zip Brander, my first product done. And I sell that product to this day for $67 a piece. So two sales and I broke even on all my programming costs and outsourcing and that kind of thing. I like your margins. Yeah. Yeah, it s pretty nice. Yeah. So that s kind of how I got into outsourcing, that first project. And as soon as I did the first project, I was hooked. Like I started just going and doing that for everything. I d get logos created and Web sites created and everything I could think of I started outsourcing. Like I was saying, I didn t have any time. So I would go to wrestling practice. I would get back and I had to go to study hall. And for like a half hour I would playing and talking to all these people who were the programmers and stuff. And I d go do my homework and I would come back and check on them again. And it was hard to do my homework, obviously. But I kept going back and forth and kind of go home at the end of the night and go back on at night and just keep talking to these different programmers. At least for me, the way I looked at myself was I was kind of like a contractor building a house. I didn t need to go learn how to do plumbing and frame. I just had to be the guy that kind of pointed to all these people that had the different parts. So I hired one guy and I said, okay, your job is to build the graphics. Your job is to do the sales letters. Your job is to do the programming. I just kind of pointed fingers and they d give me back all the stuff each week. I would put it together and there would be a little Web site there and I would go and make enough money that I could start my next idea. And this was multiple projects? You d hire one graphics guy and you d give him X number of projects every week? Yeah. Well, basically I would just -- each time I had an idea, I would post that project on one of these project boards. Someone would bid on it and I d hire them for that one job. Okay. So you were always hiring individual people, individual resources for each job and each task.
the outsource code page 6 Yeah, at first I was. But I went through a lot of people that way and after a while I started finding the ones that were really good. And I grabbed onto those people and I said, look, what s it going to cost to keep you here fulltime? And I ended up hiring a bunch of full-time people that were overseas. The first guy I hired is a great programmer. He s still with me today. I was paying him $100 a week to program. At the time, he was working six days a week like 10 to 12 hours a day for $100 a week. And he was coming out with some awesome stuff. The most powerful thing about it is for me, it was only costing me $100 a week. For him, he was making $100 a week and he s like the richest kid in his college making more money than all his teachers and just living the greatest life he can think of. At the same time, I m over here benefiting from his work and living the life I wanted to live. It s a really powerful relationship when you find people like that that are overseas or people that are in less fortunate situations that you are that a little bit of money goes a long way for them. And if you can trade for that, then it s just an awesome relationship. Yeah, $400 a month in most developing countries makes them richer than the mayor. Oh, yeah. Now what was very interesting is you mentioned that you wound up burning through a lot of people where you go on one of the boards, and again, we re going to wind up posting some resources throughout all the calls, but the basic ones that everyone knows of are Elance, your ScriptLance, your Renta-Coder, your Guru. So what you were doing is you were hiring someone and for the ones who did a mediocre job or didn t do a great job, you would just not work with them again and then focus on the guys who were strong and then tried to build closer and closer relationships with them and tried to get them to more of a full-time relationship. Exactly, yeah. As soon as you find someone good, you don t want to go back and try to find someone else to do the same project. You want to hold onto them tight, especially if they learn your system. I mean it saves you so much time explaining and trying to figure out what it is they re trying to create. It s definitely important when you find someone good to keep them and keep them close. Yeah, that s a great piece of advice. That s really what my business model is also with outsourcing relationship. I wind up hiring and firing a lot of people. And in some ways, some of the people who are just getting into this and starting to think through it, they re concerned about budgets and they re saying, wow, I can t afford to hire someone, and then if it doesn t work out, I won t be able to re-hire another resource.
the outsource code page 7 My attitude on that is really to try to tackle it exactly the way Russell did when he started up. Just go out there and try to find someone to write a script. And he wound up spending $20 and $120 and it worked great. But you know what? If it didn t, that $120 he could have hired another person for $120. The bigger risk is hiring one person, putting all your eggs in one basket at $6,000, and if it doesn t work, you re in a lot of trouble. What I ve been doing lately, which some people think is a little bit crazy, is a lot of times to start a new relationship, I ll wind up hiring three to four people to do the same exact project. And then I ll keep the one that did a really good job and then the other three I just won t work with them again and I ll either repurpose their work if it s content to something else, or I won t even use the scripts if it s tool development and that didn t work out. For me, it actually works out to spend three or four times on that initial project, and I usually start with something small just to find that one really good resource. Yeah. One thing I would agree with that 100%, because at least for me, right now, in my life, time is way more valuable than money. So I can go and hire four people to do the same project, get back the one that s actually the best, then I didn t waste the time working with person number A if they were horrible. If I have four people doing the same project and one comes back as great, I d say, okay, pay everybody else off and just work on the one that s perfect. And it saves me so much more time than hiring one person and working with them and working with them until it s perfect and it takes five times as much time and obviously a lot more money at that point. So I ve done that a lot of times and I think it works really well. Russell, it seems like you re able to give control of parts of your business or tasks to other people. I mean I think that s really the key to being a good outsourcer. Was that difficult to do? I mean most people in marketing try to do it all by themselves. Was that difficult to do that? Yeah, and I still struggle with that for some projects. Luckily at first I started doing it right away, so I knew there were things I could get rid of and have other people do. But even to this day, I struggle with things. And you guys know BJ. He went to your seminar. He s working with me right now, and that s one of his tasks, is to find all these things that I m holding onto that I feel like I have to do. And he s taken them from me and is just doing them for me. And it s a hard, hard process to let go of that. But as soon as you let go of it, oh, it feels so good. This one project I m working on literally for over a year trying to get it done. And I can t do it, can t do it, because I have so many other things I m doing. And just this week BJ came in here and said, look, what are you stuck on? This is the project I m stuck on. He s like, well, can I do it? I m like, no, it s kind of technical and I need to have my hands into it.
the outsource code page 8 He s like, okay, look. Let s spend 15 minutes. Show me how to do it and I ll do it. So I spent 15 minutes with him, he learned how to do it, and it s done. A year worth of work and I m done with it now. Just for the next two weeks I ll focus 100% on it and it will be done. And that s such a great feeling. So if you learn to spend 10 or 15 minutes to actually explain what things you think are the most important that no one else can do but you, usually you ll find out someone else could do it if you re able to do it. Yeah, it s kind of like I don t think the owner of Ford Motor Company knows everything there is to know about how each part of the car works and carburetors and all that stuff. And when you look at the big thing, all the technical stuff we feel like we need to know everything about it. But in the big scheme of things, it s not really that important to our business. Yeah, the best managers in the world and especially if you look at mid to large sized businesses, the best middle managers, when you look at people stacking layers on management, it s the guys who know how to delegate. And that s really tough. It s really hard to give away parts of your project, because Russell, if you re spending a year on something, it was your baby in a lot of ways. Oh, yeah. And for you to delegate that to somebody, it s really hard. And for me, probably the biggest change in any of my business ventures has been the day when I said you know what? I just need to delegate this. And if it doesn t work, I can pick it back up and reassign it to someone else and delegate it again. And it s hard. It s a hard first thing to do. And I see a lot of people struggling with that every day and they re stuck on doing every task themselves. And one thing I want to recommend at this point is there s a book called The E-Myth by Michael Gerber. Everyone should go out there and buy it, because this is how you re able to delegate. And I read this book last summer--. I m sorry. Can you say the title again? It s called The E-Myth. The E-Myth Revisited, I think, actually. The E-Myth Revisited by Michael Gerber. It s like $10 on Amazon.com. Yeah, I actually like the Revisited better than the original E-Myth. But it s a brilliant book.
the outsource code page 9 Well, it s a funny thing. I bought it last year. We were going to Lake Powell for a week and I bought it thinking it was a book about Internet marketing. You know, the e-myth. Anyway, I got out there on a boat and I got that one book and I realized pretty quickly that this guy knew nothing about Internet marketing. But what he knew about was how to create systems in your business. And that book had a profound effect on me and my business, and I realized that the way you delegate isn t to go and hire someone and say, okay, your job is to do this and your job is to do this. But it s to go and to create a system. Just a simple system and then you go and you find someone you can plug into that system. He talks about in the book McDonald s is a perfect example. They ll sell a franchise for a million bucks or whatever, and all they re doing is making simple hamburgers. But they ve got a system where they can go in and plug in any person off the street for $2 an hour to follow the system to create burgers and it works well. So the thing we ve been doing is before we hire a new person and before I outsource something or whatever it might be, is we go through and we create a system. And so how that works, let s say we re outsourcing our linking campaign. What we ll do is we ll get Camtasia. We ll open up Camtasia and we ll make a little three-minute video showing the exact system to do a linking campaign. And then we might show the different resources and how they do it, what we expect from them, exact numbers and then create the whole system like that. And then we go and hire someone or we outsource that to someone and we give them that video or that system and they know exactly what to do. They wake up in the morning and they push button A then they push button B and they go through the work. And you get exactly done what you want and they get exactly what they want. The linking was just an example, but with everything in our business now, we do that with the way people answer the phones, the way that the outbound calls are going, the direct mail, whatever it might be. We re creating systems so that we can plug someone in there. And let s say that person quits or gets fired or whatever. We can plug somebody else in there and they won t miss a beat because we ve got a system created that they can just tap right into. Yeah, that s a great point. You know, your last comment on is if they quit or get fired or get sick or can no longer work, I mean let s talk a little bit about how you wind up managing for that. How do you manage that risk and a little bit more about how you train them and really what the transition would be like and what your downtime is is going to be much less when you have a video in place and a training manual in place versus trying to hire someone that never had any notes or never had a system.
the outsource code page 10 Oh, yeah. It s funny. The first person I ever hired, I did it the wrong way. I brought them in and I said, okay, here s a book about linking. You need to learn how to link and then start doing it. Like a month and a half later, he came back and he was like I can t figure this out. Anyway, so the next time we did it, I figured out first real quick, since I kind of understood the concept, we made a little Camtasia video and I gave that to him. That same day he was linking. I was like, man, I wasted six weeks of me paying this guy for 40 hours a week trying to figure this thing out when I could have done it right ahead of time. You know, today we were working on a system for writing an auto-responder follow up series. At first I was going to go in there and show the girls who is doing it how to do it, and then I said wait a minute. Hold on. I m going to make a little Camtasia video to show you. She s like why are you going to do that. I m like that way if you quit or if we need to hire someone else to do it also, then I did the work once and I don t have to keep doing it over and over again and re-explaining and re-show you, you know? And it just completely speeds up the process. So before you start hiring people or outsourcing anything, I really recommend reading that book and learning how to create little systems for anything you want to outsource. Yeah, I think that s a great point for everyone on the call to think about, is really kind of building through your system and not just picking up one person and kind of dumping all your knowledge onto them and hoping they re going to work with you and stay there forever. It s best to really come up with either a manual or a series of videos or training audios. I mean it sounds like of funny. I think part of the reason why a lot of people come towards Internet marketing is they don t want to be involved with the politics and all the structure of big business and things like that, but if you really think about it, the fact that they have training manuals and the fact that they have a corporate Internet, I mean that s stuff we can all learn from. Yeah, they figured out after all these years it s smarter to copy them than go and try to refigure it out over the long run. One thing you just said brought up in my mind also is the fact that you want to be careful when you re hiring people. You don t want to just give anyone your entire system, either. I know one friend who did that. He hired this guy, brought him on, trained him on every aspect of his business and this guy just went and pretty quickly realized he could do this all on his own. He went out and just started doing it on his own and became a direct competitor with the exact same product as this guy.
the outsource code page 11 So when I create these things, I really try to segment it where the programmer does the programming. The guy that does this does this. The guy that does this does this. And independently they re doing powerful things but they can t make that into their own business by themselves. Everyone s got their own part of the puzzle and there needs to be a separation between the two so that no one has the full everything. Because then they could just go and take it. They might not; hopefully you get someone who is trustworthy. But there s always that chance. And so it s important not to hire one person to do everything for you. Kind of break it down into a couple of separate people, I believe. How are you managing that if they re in the same office? Like for my business, you know, I m doing that also and I m kind of very careful on which pieces of the puzzle everyone sees. But I m dealing with people in different countries and they re never communicating directly. How are you dealing with that if people are in one office? I mean obviously there s a struggle, because everyone kind of sees what other people are doing. But at the same time, each person is spending so much time focusing on whatever it is they re doing, they don t really -- at least they can see that to learn that part of the system would be a lot more difficult than just doing what they re doing for their pay. You know what I mean? Yeah, that s a good point. Especially when they re in-house, though. I mean eventually they are going to know part of your business. Do you have them sign any kind of protection or anything like that? Yeah, we do. We have non-disclosure statements and non-compete agreements that we have everyone sign before they come on. That s another thing. You shouldn t hire people usually that are too entrepreneurial, because if they are that can be a problem. I ve got two guys that I hired that are really entrepreneurial, but we signed a contract and said, okay, look. I know your point here is to be here for a year to help us create these things and build these things, and then you re going to do stuff on your own. And they realized that and I realized that, and so we structured it that way. So you know ahead of time. If you re hiring people -- I mean you re going to be able to tell, obviously, if they re looking in there to come and compete with you eventually. So you just have to be kind of careful with that. That s a great point, and I think a lot of people don t really cover that. And when you re hiring people for certain tasks, when you hire sort of the young, really aggressive guy who s like the college wrestler like you who is coming out of there, at the end of the day they re going to have much bigger aspirations than just kind of working for you and churning this out at an hourly rate. So I think looking at and trying to judge the character of each person is tough. I mean we re talking about sort of a lot of management skills and a lot of recruiting skills that, depending on what business and what background you re coming from, it s hard to get.
the outsource code page 12 I mean it s very impressive, Russell, that you have this level of management skills just coming out of college and not spending 25 years working at Arthur Andersen or Senture or something like that, you know, with all these project management skills. It s very, very impressive. Well, yeah, and I m learning along the way, you know what I mean? Like six months ago I was making a lot of mistakes. But now those mistakes have been figured out and cleared up. So you don t come out of the gate perfect, obviously. You ve just got to be able to figure out the problem, adjust and step up and make the changes and then keep going forward. I think that s really important. I ve got a question for you, Russell. For the people who are on the call now who are doing it all by themselves, what advice would you give them in looking for? What would be like the next task would you recommend that they try to outsource for their Internet business if they were doing it all by themselves right now? The very first task you should outsource is your customer support. In fact, even if you re not outsourcing your customer support, you should be using a pen name with your customer support. Your customer should not -- at least I feel -- they shouldn t -- you know, you re a company. Let s say you were down at Walmart and you purchased some eggs and the eggs were bad, would you call up the CEO of Walmart? No, you wouldn t. You d go to the customer support staff and you d talk to them and get it fixed. Well, Howie would. Howie probably would, but most people wouldn t. Well, the problem is that s the way most people approach Internet businesses. They come and they want to talk directly to the person who created the product, and it shouldn t be that way. That s not your task. Your task is to create the content and it s someone else s task to handle support issues. And so that s the first thing you should outsource. Even if you re doing it yourself, you should be using a pen name so that people realize that the relationship and your job is not to become the person that they go to for all their support issues. They go to the support person. You know, I used a pen name for a while before I switched over and actually hired someone. And even still to this day I log in to my help desk sometimes and people are saying, hey, Russell, I have a question. And it shouldn t be that way. Their job is not to come to the CEO of a company to find out the answer to their question. They should be going to the support staff. Now, if they have things that directly relate to you, they should go to you. But man, when I first outsourced customer support, that was the greatest day of my life. I was, at the time, spending about three and a half to four hours a day answering emails.
the outsource code page 13 Wow. And it was killing me. I mean I was getting so frustrated. I would wake up in the morning and look at the computer screen and be sick to my stomach. I would answer a couple and then they get further and further behind because I would never do it. And I would never get into a project because I would know in the back of my mind I ve got these emails I need to answer and these people are waiting. That guy needs his refund. You know, just such a horrible, sick feeling. So the first thing I did, I set up a customer support desk. And then I added as many Frequently Asked Questions to the help desk as I could. And then I hired someone and said your job is to learn all my products and answer all the questions. And instantly, overnight, this huge weight was just lifted off my back. Can you imagine that? It adds four hours a day to my workday, plus I don t sit there worrying about that anymore. I m able to get so much more done now just from that one little tiny change. So that s the first thing I would get rid of as fast as you can, is your customer support. Four hours a day extra times a week times a year is a lot of time and a lot of money. If you re paying your support person -- I was paying mine $150 a week to answer all my emails. I know everyone thinks what s my time worth. Well, my time is worth a lot more than $150 an hour, and I m paying that for a week to give me four hours a day times five days a week. I mean it s the greatest investment in the world, I think. I don t know how much more I can say that. But get your customer support out of the way as fast as possible. Yeah, I d like to give a resource for that. I always pronounce the names of all these things wrong even though I use them every day. The help desk solution that I use for all of my projects is www.kayako.com. For me it s just a great help desk. There are different versions. I think I spend $30 per month per project. And it s got a ticket system which is great, so people cam create tickets. And when you have multiple support people working, you can actually see their responses and they close tickets. And what s great is you can actually see when your support people aren t doing their job. And you can actually go in there and see if there are a ton of open tickets and tons of things that aren t replied to. Because if you do this with email and set up support@-- whatever.com, what s going to happen is everyone is going to email that account and you as the business owner or manager either have to look at that every day or you have to have blind faith that that s going to be just taken care of magically and you don t really know what s happening if you re not looking at that email account.
the outsource code page 14 And the other key thing for this help desk solution that I mentioned, you can build a knowledge base online, so when you re answering questions, you can actually have it added into the knowledge base and it turns into more of a dynamic FAQ. For my projects, it s been a great solution. Yeah, that s a great one. I used that one for a while. I actually switched to another one. Not because -- I mean www.kayako.com is great and it s got tons of features. This one has a lot less features, which was what I was hoping for. The one I use is called Inverse Flow. I m guessing it s www.inverseflow.com. If not, you can search on Google. And like I say, it s not as feature-rich as the one you re talking about, but it works pretty well for me also. Well, what I ll do is after the call when I post the recording, I ll post these resources and links for everyone in the member site. So I think that s a great point in outsourcing customer support. I think one of the concerns and questions that come up is when you re dealing with I guess what your front-facing person is -- you know, who is the person who is dealing with your customers -- it s a little bit harder to go overseas where English might not be the first language versus if I m hiring a programmer somewhere or if I m hiring a graphic artist somewhere. How did you manage that? There are a lot of people here in the States that will do support for relatively cheap. You know, we just barely pushed over and have someone actually inhouse. Before that, for the last year we had a lady that did our customer support desk, like I said, at $150 a week. She did four or five people s desks, so she was just making pretty good money between all of them. You know, you can go -- you know, same board. You go and you post for programmers and graphic artists. You can go for support people and you can usually get people in the States pretty cheap. I know I ve got a lot of friends who are stay-at-home moms and I hire them a lot of times for projects -- not customer support, but I use them a lot for linking campaigns and things like that. But I know Armand Moran, one of his wife s friends I think does all his customer support. So the stay-at-home moms are a great resource. You tell them, look, for two hours a day when your kids are taking a nap, I ll pay you $20 a day or whatever. I mean that s a great deal for them and for you. Go local a lot of times. You can go to like www.craigslist.com. You can post local jobs there and get a lot of people who are interested in working from home. The thing about overseas you have to look at, overseas you can get work really, really cheap. But in the States you can get work really, really cheap if you know how to do it right. You re not going to be able to get a programmer in the States very cheap, but you can find customer support people really cheap. You can find all sorts of stuff like that.
the outsource code page 15 How do you word your advertising if you use something like Craigslist? You know, I ve actually never used Craigslist. I just sort of heard about that just this last week. I use www.boisehelpwanted.com. So you re saying in your local--. Right. In any local paper, how do you -- do you have any magic things to try? Do you say data entry? Do you say you have an Internet marketing business? How do you usually phrase it? A couple of things we do, you know, most of the ads in there if you look at them are really, really boring. So I just use basic direct response copywriting. I wrote like a three-paragraph mini-sales letter talking about the job. And then I gave them like a recorded message line so they call in there. They call like a 1-800 number. They hear our recorded message which just says this is what the job exactly entails, the type of person we re looking for, and kind of prescreen them that way. And then after they ve been prescreened, if they re still interested, then they have a number they can call or email at that point. That way it kind of filters through all the people that are just browsing and get people that are really interested. That s a great tip, to use that as a screen. Yeah. Well, what happened the first time we did it, we had -- it s funny. Like I said, I put up a little mini-sales letter. I think the first day we had like 50 or 60 people apply. And we pulled it down and had all these tons of resumes coming and phone calls and emails. And my girl here that s working, she s trying to answer the phones and trying to set up all these appointments. I spent like a week interviewing everybody. I m like, man, that s a lot of work. So the next time we did the prescreening thing and cut that down to just people who are really interested. It saved us a ton of time. Yeah, that s an interesting way of looking at it, to look at local resources. To go for stay-at-home moms. Another resource that I know that people a lot of times will go towards is go to the local universities and post an ad there or talk to the professor of marketing or something like that and saying, you know, I m either looking for an intern or looking for someone who wants to work part-time, you know, X number of hours a week. Oh, yeah. That s how I got my first employee was an intern. It was a girl who was in one of my classes and she was looking for an internship. And I said, well, hey, come work for me. She was like all right. And at first, she worked for free. That s how interns do it. They come and work for free. And then after 150 hours or whenever it was up, she was doing such a great job and saving me so much money, I was like how much would it take to keep you here? She was like $8 an hour I ll keep working for you. All right.
the outsource code page 16 At that point, she knew what I was doing already. She knew how to work with our customers and what our products were. She s been with us for over a year now working full-time. And we ve given her a couple of raises, but like I said, she started out at $8 an hour and saving us and making us a ton of money with what she s been able to do. She s gone through and in the last year she s learned how to use QuickBooks. She s learned how to do direct mail. She s learned all this stuff. And so she s basically my accountant now, you know, five or six different things all wrapped up into one. So it s been very, very valuable having an intern. Like I said, you get them to work for free at first a lot of times. Now, when you had her working as an intern, did you have an office at that point? Well, kind of. We own this little duplex and we kicked out our renters in the basement. And so in the basement apartment, we turned that into an office. So she would come into the basement apartment there and she had her own little desk and that was about it. Because I think that s one of the challenges with local employees, for a lot of Internet marketers who don t have office space. It s a challenge because it s like you really don t want these people kind of working in your house. Yeah. And many of the Internet marketers right now, especially the ones -- not really only the ones who are just starting up, I think a lot of people have been pretty serious about this. They ve just chosen the lifestyle where they want to work at home and it s a fine line or it s very hard to get people to work in that environment. This is one way we re doing it now, actually, with all of our stay-at-home moms that are in our network. There s a software, and I think -- let me make sure I have the right URL -- it s called www.grube.com. Have you guys heard of it? Oh, yeah, yeah. It s the guy who created Lotus Notes. Yeah, it s Groove. www.groove.com, I think, Groove Virtual Office. Anyway, we just started using this. This is how it works. It costs $220 per person, so each person we hire, we ve got to invest $220 for them. They install the software on their computer and it becomes like a virtual workspace. All of our employees and all of our people that are outsourced that are full-time have one of these on their computers.
the outsource code page 17 It s awesome. What happens is all of them log in there and it s like my own little private instant messaging community so we can just message each other within just our little network. And then let s say I have a project. Instead of going and explaining it to person A and then person B and person C that are involved, I open up a little workspace. I type down the information about the thing. I create a Camtasia video. I describe the whole thing in there basically and I can say, okay, Tasha, you re in charge of the copywriting. We need a two-page opt-in form here. You, you re in charge of the Web site design and the auto-responder set up. You re in charge of getting the graphics done. And you create the whole thing and you include the three people or four people involved in the project and you click submit. It sends all those people a little message instantly on their desktop. It pops up there s a new message for you. You log in and read the instructions. They watch a little video. And there s a little like discussion board for each individual project. So they come in there and they can ask a question about the project or they can do their deliverables, that type of thing. I check back two hours later and it s all done, it s all built and submitted in there. Just like a little virtual office. Yeah, I ve heard great things -- it s actually www.groove.net. Yeah, it s www.groove.net. The other solution that I was using for a while, and I probably should get back to using because it was really good, was Intranets. www.intranets.com. You know what? I m on the Web site right now. It looks like they were acquired by WebX, which is a really good company to do Webinars if you need to demo something online that s more interactive that you re not doing as like a canned video. You can use WebX s solution for that. And the Internet solution, years ago when I used it, it was $30 or $40 a month. So I ll have to check and I ll post a note on the member site. It s probably gotten a little more expensive. Yeah, I think those project management software like that, they re awesome. We create our systems and we build them in there, so the next person that comes in, they see the system. They ve seen all the old questions that old people have asked in there and they can find them real quick. You know what I mean? So it saves a lot of time and a lot of frustration. So using stuff like that works well if you don t have an actual office where you can meet with people. Yeah, that looks like a great resource. Especially we ve got virtual assistants and having something like that would be very beneficial. Oh, yeah, it s awesome. And the greatest thing is if you ve got three people working on a project, it gives them a place so they can brainstorm and work together so you don t have to sit there and explain it three different times. You know what I mean? It saves you so much time just by having that right there.
the outsource code page 18 Yeah, no, that s a great resource. And again, we re going to post all these resources as links in the member site. I think this is really interesting, Russell, because like you mentioned when you started the call, you have a very different approach versus all of the other speakers that we re going to be interviewing over the next few weeks who mostly have sort of outsourced help either overseas or outside of their office. And you ve taken the point of view where you re going to want to manage this and kind of control it in one office internally. Yeah. It s kind of funny. My whole life I never wanted to have an office. I wanted to -- my whole Internet life, I m sorry. I figured I d always have all these people outsourcing. But it got to the point -- and this was the problem with outsourcing -- is it creates a bottleneck. Everything had to come back through me. All the graphic design, the Web site design, the copywriting, the programming came back through me, kind of like a bottleneck. And I had to go through and review each thing, figure it all out and then go and create the site together. It just took a lot of time with that bottleneck effect. So that was the one down side I found with outsourcing. So the first thing I did was hire someone to become the bottleneck for me so I wouldn t have to be that person so I could step away and obviously have more free time. But the other thing is with having people in your office, at least for me, it speeds things up. I can walk in there and show something on the computer in two minutes of what it might take me a half an hour to an hour through instant messenger or other means. And so I ve -- I mean I ve just in the last year, like I said, have been switching all of our outsourcing to people actually internally. We still have our programmers and stuff that are overseas, but most of our -- all of the other operations are coming into our office where I can keep a close watch on things and make sure all the systems are running well together. And just before we talk a little bit more about what your experiences are, and we want to go through some sort of success and failure stories for the last 15 minutes of the call, I just had a question for the people on the call who are going to be interested in setting up the office and actually bringing in employees, can you just spend -- I know we could do a whole teleseminar on just this one topic -- but can you just spend a few minutes more on just sort of how you re handling human resources. You know, you mentioned you have non-disclosure agreements and non-compete agreements. Are you having to provide health insurance for these individuals? Can you just talk a little bit more about that? Yeah. Before I do, I ll mention that most of the things you re asking me, I outsource all that stuff, too. I don t have my hand in much. I have my hand in as little as possible. There s a quote from Ron LeGrand that I try to live my life by. He says the less I do, the more I make. And so I try to figure out ways to do less and less.
the outsource code page 19 So the girl that s working for me, she s in charge of figuring out how the health plans work and figuring out how the accounting works and all that stuff so I don t have to do it. But I do know enough that I can share on the call. Always remember you can outsource all this stuff. Don t worry about it on your own. Don t be doing it yourself, you know? Yeah, with health insurance, the way we re doing it now is three months they don t get anything. They re just kind of working. After three months, we reevaluate, and if they re valuable enough, then we start helping them. Like the co-thing. They pay part of the insurance, we pay part of it. And I m not sure yet. Probably after a year, we ll re-- we ve only got one girl that s worked a year. We re paying all of hers, so probably after a year we ll re-negotiate with everyone and give them full insurance and things like that. The biggest key to this is let s say you re hiring someone at $8 an hour. You re paying insurance, so the total cost comes up to like $11.50, $12 an hour you re paying this person. As long as they re making you $12 an hour, then it s basically working for free. That s the way you really have to work at it. When I hired a guy to start doing phone sales for us, he was like this is how much money I want for it. Well, how much money are you going to make me? As long as they re making at least that much, it s not a problem. You could be asking for $800,000 a year, but if you re making me $850,000 a year, then it s worth it. So always look at that, when you re bringing on new employees, is how much is it going to cost me for that person, and then how much is that person going to actually make me? As long as they re at least breaking even, keep them around. But yeah, health insurance. I don t know the exact numbers. It s probably like $100 a month for each person, maybe a little bit more than that. And then Worker s Comp -- what else is there? I m not even sure what all goes into it. I don t look at that too often. Yeah, it s just an interesting point that I think everyone s going to have to look at if they re going to want to take it in the route that you ve been running. Yeah. And there s definitely some things to consider overhead-wise when you re trying to build your office. But like what you mentioned was a great example. As long as you re recouping that investment, then you ll do it every day. And the biggest concern I hear people say all the time is like, well, you know, I don t know how to pay taxes for them and how to do this and that. Well, that s easy. You don t do anything. All you do is you have QuickBooks and you keep someone. Let them watch a QuickBooks tutorial for an hour and they ll figure it out. It s not that difficult.