Howdy GirdleyWorld! Today we’re talking
- My Associate Model — How to find great people to partner with
It’s seriously the best. And I think more people should use it. And it solves the question every business builder faces…
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How do you find the right partner?
Say you’ve got an incredible business idea.
All I need is someone to run with it! you think. Someone who’s all-in, who really believes in it, who will push your idea to its greatest potential. A missionary.
But here’s the hard truth:
Nobody wants to work on your idea.
You definitely won’t find a missionary. The best you can do is find a mercenary, whose loyalty you buy… until they find something better.
But I’ve got a solution. It’s how I built two of the companies in my portfolio (Scalepath and Near), and I’m planning to do it again.
It’s called the Associate model.
How the Associate model works
The whole thing boils down to three steps.
- Find the right person, at the right time
- Make an offer they can’t refuse
- Build them, and build with them
For me, the ideal outcome of this process is a business with:
- High-profit ceiling
- Low up-front and ongoing capital requirements
- A CEO who runs the business and is personally invested in its success
Let’s break it down.
Step 1: Find the right person at the right time
The right person
Tons of people want to be entrepreneurs.
But not everybody has the resources or experience to do it independently.
My parents were entrepreneurs, so I learned stuff around the dinner table that I never would have gotten from school, friends, or jobs.
There are tons of people out there just as smart or smarter than me. But if their parents had regular jobby jobs, they don’t grow up in entrepreneurship. Which, of course, is fine…
Until they want to start a business.
And then they’re hungry to learn.
The right time
Life is full of inflection points where things change.
Leaving home. Graduating college. Getting your first job. Starting a family. (Up until the big inflection point, when you die.)
So I’m try to triangulate between
- what I have to offer
- what people want
- and the right inflection point in their journey.
I know a ton about building businesses, and I like to coach people. I also have the resources to invest in something up front. Those are both things that young potential entrepreneurs want and lack.
As for inflection point: the sweet spot for me is someone smart who’s on their 2nd or 3rd job, in their mid-20s.
They’ve learned how the world works. They’re hungry for something different. And they’ve got lots of gas in the tank.
So how do you find those people? It all comes down to the right offer, in Step 2…
Step 2: Make them a tempting offer
I lay it all out up front: I’m hiring people to find their next job.
Ideally they co-found a company with me. That’s happened numerous times.
Or they might find a job inside one of my companies, or go work somewhere else, or start their own solo company.
No strings attached.
While they’re with me, I’ll be teaching them tons of stuff about entrepreneurship. And I’ll give them projects to take care of that elsewhere would be above their pay grade.
The flip side: I pay half to three-quarters their market rate. Enough to get by.
But not enough where they view it as a permanent thing.
They have to sacrifice a little for the role, but it’s built to be temporary.
This learning-heavy, pay-light combination attracts the kind of people I’m looking for:
Two marshmallow people. Long-term thinkers. They’re not just looking for their next job… they’re looking for a partner.
Here’s the full job description:
Step 3: Build them, and build with them
Once I hire someone, we spend lots of 1-on-1 time and get to know each other.
I coach them on the stuff in the job description above, and show them how to sniff out good ideas: Exploring different spaces, markets, finding trends, spotting tailwinds, etc.
Then we find and develop a business idea together. That way the business is their baby just as much as it is mine. Missionary, not mercenary.
That’s exactly how Sam Trumps and I started Scalepath (I wrote about that here.)
That’s it!
My associate model is a total win-win. I get to do what I’m good at (coaching), and my associate gets to start a business.
My system lets me recruit the top 5% of aspiring entrepreneurs who are at an inflection point where they need help.
I think more people in my situation should do this.
It’s super fun, and it’s inspiring to work with these young people.
It can also make really good money — since we’re looking for ideas that aren’t capital-heavy, an investment of anywhere from $50K - $200K up front can get a business up and running that creates real value.
And since we’re not doing VC-type ideas, we retain most (or all) of the ownership.
So far, 100% of my associates have trusted me and included me.
It may not happen next time, but that’s a risk I’m choosing to take.
Best case, I’m investing in a multi-million dollar or more outcome. Worst case, I just lose some time and a little salary money.
I’m not hiring any new associates right now.
But I’m sharing the model because it really works for me.
Start with the right founder, and work with what you have. You’ll find better ideas and be much better off.
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3 things from this week
- Appetizer: I have never had a partnership fail because of misalignment. So I wrote a thread about the easiest way to get people on the same page at the beginning of a project: the Memorandum of Understanding!
- Main: Startups die from internal conflict more often than competing forces. Peter Thiel found a solution:
“Make every person in the company responsible for doing just one thing… I started doing this just to simplify the task of managing people. But then I noticed a deeper result: defining roles reduced conflict. Most fights inside a company happen when colleagues compete for the same responsibilities.”
(Read the whole quote in my friend Houck’s newsletter - or subscribe by clicking here!)
- Dessert: There’s something about an unshaped cowboy hat…
That’s all for this week!
Michael
