Episode 39 |

Finding the Ideal Work-Life Balance Through Outsourcing: Tim Ferriss

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This Week’s Guest:

Tim Ferriss is an entrepreneur, angel investor, and public speaker. He’s a guest lecturer in high-tech entrepreneurship at Princeton University, and is the author of the New York Times bestseller, The 4-Hour Workweek. You can find Tim on Twitter @tferriss.

Episode:

While most entrepreneurs and busy professionals are glued to their email and phone, Tim Ferriss mastered the art of delegating. The majority of your to-do list can be outsourced, and with a little direction, a virtual assistant can free up your time, allowing you to work less while earning more.
We Discuss:

  • Where you can find virtual assistants, and why a group is better than one.
  • How to determine what you should delegate, and what you should work on yourself.
  • How to decide on a fair pay rate.
  • Hiring the right candidates and avoiding costly mistakes.

Here’s what I learned:

Tim’s Journey to Personal Productivity

  1. Tim attended Princeton as an undergraduate, focusing first on neuroscience then on linguistics.
  2. He moved to Silicon Valley in 2000, working first as an employee and then as a founder of his own startup until mid-2004.
    • His startup had two branches: one was pharmaceutical design and then the second was over-the-counter sports nutrition products aimed at elite athletes.
  3. In mid-2004, Tim was working 80-90 hours per week.
    • Financially, he was very successful, but he had no free time.
  4. He decided to take a step back and assess his goals by going to London for four weeks to decompress.
    • During this time, he set a rule that he would only check his email once per week, which was a huge difference from his normal routine.
    • Within four weeks, the company’s profits went up close to 30%.

Outsourcing Your Life

  1. Tim ended up traveling the world for 15 months, to see how far he could push the concept of outsourcing and automating.
  2. He started to delegate the time-consuming, unpleasant, and boring tasks in his professional and personal life to someone else.
  3. The first step to effectively outsource is to calculate the value of your time.
    • Your annual income is a deceptive number, if your income raised from $50,000-$75,000 you may be putting in 30 or 40% more hours.
    • Tim recommends determining your per hour earnings instead.
    • For example, you can find someone to compile excel spreadsheets for $12.50 an hour, but you need to know what you make per hour before you decide what you can pay someone.
  4. Tim started running his entire company with a virtual system, including product manufacturing, quality assurance, shipping, customer service, and accounting.
    • This was all done by people in different states.
    • You can delegate everything from travel arrangements and having a digital concierge who’s on call 24/7, to hiring an army of MBA’s in India or the Philippines.

Effectively Outsourcing

  1. The first thing you need to do is a time audit.
    • Use the 80-20 principle-20% of your activities produce 80% of your desired outcomes.
    • If those activities can be done in front of a computer or from a phone, they can be delegated to someone who costs much less than you per hour.
  2. The trick is to find the appropriate person to outsource to, and Tim has rules that he follows when hiring virtual assistants.
  3. The first rule is that he never hires a single individual.
    • If someone gets sick, gets fired, or quits, he doesn’t want to have a project fall through the cracks because of that.
    • He searches for virtual assistant groups or companies who have several assistants to outsource to.
  4. He will sometimes use Elance.com, and when he posts projects on the website, he will usually receive between 20 to 30 proposals.
    • He then takes the top 3-5 candidates and assigns them a short task that should take them less than 30 minutes.
    • He does this to test reliability, which is even more important than their skill set.
  5. There may be times when you think it would be faster to complete a task yourself as opposed to explaining it to someone else, but it’s still on your to-do list for a reason.
    • Also, once an assistant has completed a certain type of task for you, they can help you with similar tasks in the future, which saves a lot of time.

What Not to Outsource

  1. There are certain tasks that Tim won’t outsource, and it’s usually because he either enjoys doing them, or they require a high-level of English proficiency, which is hard to replicate with overseas assistants.
    • He keep all of his high-level marketing and budgeting decisions in house.
    • He makes all of the creative decisions on marketing and copywriting.
  2. For Stephan, having an assistant write drafts of blog posts or article helps him to overcome mental blocks.
  3. Besides these high-level decisions, there are very few tasks that can’t be outsourced.
    • Tim even delegated his dating life at one point, and his assistant got him 50 dates!

Mastering the Low-Information Diet

  1. Tim has recommended for others not to keep up with all of the innovations in their field, because you can’t possibly try everything.
    • He knows people who have their assistants compile summaries of various magazines and trade journals that they want to keep up with.
  2. Tim tends to limit his core competencies to just two or three activities that he will focus on.
    • Developing this selective ignorance and following a low-information diet is key to being good at anything.
  3. You could also pick up a book from the 1930’s and it would probably do more good than trying to keep up with every new trend.
    • Just because something is new doesn’t necessarily make it good, so you have to separate new from valuable.

Avoiding Outsourcing Mistakes

  1. Fortunately, Tim hasn’t had any huge outsourcing mistakes.
  2. To ensure that mistakes don’t happen, you have to be very clear with instructions and expectations.
  3. Another helpful tip is to ask for updates very soon after the task has been assigned.
    • When you assign a task, make sure that they confirm and understand the task by paraphrasing it back to you.
    • Then, have them send you an update shortly after starting-for a task that is going to take 10+ hours, have them check in after 2 hours of work with a progress report.
    • This will help you to fix any misunderstandings or errors before they spend that much time working on the project.

Links and Resources Mentioned

The 4-Hour Workweek
GetFriday
Elance

Get Optimized!

  1. Search for virtual assistant groups or websites that have several team members, so if someone gets sick, fired, or quits your project will not be left unfinished.
  2. After finding a few trustworthy candidates to outsource to, assign them all 20-30 minute tasks to test their communication and turnaround time.
  3. Check out Tim’s book The 4-Hour Workweek to get more inside tips on how to effectively delegate and find more time for your personal life.

Thank you for listening!

As always, thank you for tuning in. Please feel free to contact me or leave a comment. If you enjoyed this episode, please share it!
-Stephan

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