Human building machines

Human building machines

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  Our USP Machines

You might have noticed that Joe and I haven't been as visible during the past few weeks. In addition to spending a much-needed vacation in Thailand, we also got the amazing chance to speak at the Dynamite Circle event in Bangkok, where we had the opportunity to share our stories and experiences with an amazing group of entrepreneurs from all over the world.

Both Joe and I have given group presentations before, but never to such a fantastic group of friends, peers, and mentors. Knowing we were going to be sharing a stage with Derek Sivers (Who’s given some amazing TED presentations), Simon Black from SovereignManChris DuckerBrendan Tully, and a host of others we have a ton of respect for…to say we were a bit nervous would be a bit of an understatement. Talking about keyword search volume, ordering/editing content, etc. would be way to specific and niched-down for this audience.

Instead, we put together a presentation on our USP that has been applied across numerous enterprises and organizations, sharing our achievements and failures when it comes to assembling a group of individuals who can successfully complete very challenging jobs at scale.

We wanted to share our presentation's slides, notes, and thoughts with you right away. It was titled "Human Building Machines." All of these ideas and observations have more to do with our actual business than just creating specialized websites for profit because they were developed through experience and trial and error. We're hoping this will give you a better understanding of how we put together teams of individuals to work with us so that you can

So let’s get to it!

Slide 1

Joe and I talk about our backgrounds and how they helped us get to TryBPO and AdSense Flippers from a mortgage company. (Listen to this audio episode for additional information on our tale.) The capacity to establish teams to manually scale processes was one of the things we found to be of enormous benefit along the way. In the hopes that it will inspire some of the guests to establish and expand their own businesses, we wanted to reveal some of the behind-the-scenes details of our company.

Building out human machines is ideal for projects with a process-oriented focus, but it might not be the best choice for work that requires more creativity. such as a marketing firm. Since human beings are normally hierarchical, there are some situations where a flatter organizational structure is preferable.

We had high hopes of altering the model when we initially arrived in the Philippines. Our business culture lacked the "Googlish" vibe we were going for. (You understand what we're saying... (Bean bags in the break room, flatscreen PS3s for lunchtime gaming, cappuccino makers, etc.) Sadly, there were two issues we had to deal with:

  1. Cultural Differences – The team of Filipinos we hired responded to and respected a more traditional company and culture.
  2. Core Competencies – Joe and I have plenty of experience managing and finding success with hierarchical business structures.

It was tough for me to come to terms with, but we realized that we can solve the biggest problems and provide the most value to our partners and clients when we build human machines and remain process oriented.

A human machine is what? It involves breaking down a complex process into smaller, more manageable tasks, assigning those smaller pieces to specialized individuals or teams, monitoring and reporting on efficiency and quality, and repeatedly replacing yourself with new methods.

Although the idea of a "human machine" may seem a little harsh, it's actually the greatest way we have to describe what we do. Do any of your agents or workers grow tired of concentrating on the same very particular duty over and over again? inquired one of the guests. Does that stifle innovation?

Yes, it can get dull or monotonous, which is why we employ people with personalities that are better suited to these kinds of jobs. In order to prevent the duties from becoming overly repetitive, we also offer very thorough cross training that still enables us to batch the work but helps the agents switch it up over time. It's also important to note that (again, I'm generalizing) Filipinos often find happiness in family time, providing for their family, etc., with work serving as only a means to that purpose. We set up our teams to support their objectives by providing flexible hours, work-from-home opportunities, etc.

Though creating human-like machines is admirable, how does this measure up to actual automation? Instead than hiring more personnel to complete the work manually, wouldn't it be preferable to totally automate the process? We wanted to discuss some of the benefits and drawbacks of human machines against automation.

Advantages:

  • Lower Front-End Costs – Building a team to test something out can be considerably quicker and less expensive than spending the next year and $100,000 to finish the programming necessary for full automation. Bootstrappers have a fantastic chance because of this!
  • Flexibility With 3rd Party Platforms – A sophisticated level of integration using APIs and third-party systems is now necessary for many projects. When it comes to full automation, these 3rd parties changing their platforms, TOS, etc. can be quite expensive and inconvenient. These modifications can be made considerably more rapidly and easily by human machines.
  • Personal Touch – True automation frequently leaves behind signatures that can be challenging to conceal without considerable effort. (For instance, automated backlinking) Including human input will always add some degree of variation and a human touch that complete automation can't. When it comes to jobs or projects that involve customers, this is extremely important.
  • Stop-gap Or Testing Solution –Since human machines are easily assembled and disassembled, flexible scalability is possible until real automation can be developed and implemented. Additionally, it enables you to experiment with your vision without having to commit the time and resources that might be necessary after it has been shown to "work".

Disadvantages:

  • Long-Term Costs - While the initial cost of automation may be high, your recurring costs will likely be substantially lower in the long run, and you will eventually "break even" on automation.
  • Human Error Rates - When completing things manually, there will always be some packet loss that you might not have with true automation. This can be particularly expensive if your error rate has a large negative impact on your revenue or if you're compounding errors through in-line procedures.
  • Personnel hassles: Let's face it, having staff isn't always great. Uncles who are ill, no-shows, complaints, and internal fighting can all be draining at times.
  • Typically Slower - True automation has the potential to be immediate, however team collaboration might lengthen completion times. This wouldn't be appropriate for some applications (like a keyword research tool like LongTailPro).
  • The ability to replicate skill sets across the business is crucial to creating human machines. Our mentor, Dan Meyerson, an old-school executive who has used this technique to teach thousands of people at Time-Life and as a consultant for AOL, taught us the most efficient way to do this. There are five important stages to follow:
  1. Explain - Provide a high-level summary of the project and the specific procedures required to perform the work or acquire the ability you're attempting to transfer.
  2. Demonstrate by walking someone through the process step-by-step while describing in detail each step.
  3. Practice - Let the agent or team member finish each stage of the procedure, pausing after each to review and/or fix errors.
  4. Observe - Request that the agent carry out the complete procedure from beginning to end without stopping. After every task is finished, go over the procedure again. Drop back to the Practice step if there are any significant errors.
  5. Feedback - Inquire about the agent's or team member's opinion on their performance. Make sure they comprehend the procedure and can continue to accurately reproduce each step by asking open-ended questions. If the agent is not quite confident performing the duties on his or her own, go back to the earlier steps.

Example #1 – Our Mortgage Company

Our issue was that, despite the fact that we were now in charge of our own business, our income was still largely dependent on the client job that we performed personally. We decided the best way to do this would be to start replacing ourselves with paid loan officers since we wanted to transition from working for ourselves to actually running a business.

Unfortunately, we soon discovered that we had switched from being loan officers to being recruitment/staffing professionals. The process of hiring loan officers took a lot of time, and we were spending more time on it than on helping them improve their skills, help them with loans, etc. Our solution was to create a lead generation channel that would facilitate our move from working.

We discovered and recruited a VA from the Philippines to assist us by advertising on Craigslist and other message boards around the nation to help us attract loan officers. At the time, outsourcing and Virtual Assistants were still a relatively new concept for smaller businesses. In order to spend more time speaking with and working with quality candidates, we instructed her on how to qualify potential hiring. Through the front-end outsourcing of high-volume, low-value work, the difficult challenge of recruitment was resolved.

Following this, both the mortgage sector and our business plummeted, but we soon discovered that by using an offshore VA and a lead generation funnel, we were on to something.

Example #2 – Local SEO Company

In the end, Joe and I both took on "jobs" once more, and we discovered a high-growth company where we could truly make a difference. Small and medium-sized businesses around the nation might purchase Local SEO packages from this company. The company tripled sales in less than 6 months and eventually reached a position where they were generating more than $1M in revenue per month, so we found ourselves in one of those "high-quality problems."

This would have been fantastic, but the operational team's and their process' capability at the time was far exceeded by the sales growth. Every customer is given to a single employee, who completes all the job for that one client. As a result, every employee had numerous tabs open.

Joe and I had to redesign the operational part of the company by dividing the difficult process into manageable pieces so that an expert could finish the work. If you have ever attended a Catholic school, you may recall the penalty of repeatedly writing a sentence on the white or black board. (Joe Magnotti's Sesame Cake is off limits to me. I won't consume Joe Magnotti's food.

The innovative, out-of-the-box thinking students discovered that batching phrases vertically rather than horizontally is MUCH more efficient. (I, I, I, I...) will do, do, do, do, etc. This is a straightforward instance of what Tim Ferriss refers to as "batching," and when used in our business, it allowed us to process numerous

Example #3 – Starting AdSense 

We lost a significant customer as we were setting up our outsourcing business, and there was no clear way for us to rapidly transfer the agents working on the campaign. We started looking for a procedure they could work on that would earn us some money until we could get them reassigned because we knew they would be effective in a "human machine." As a result, we built out niche websites that were monetized using AdSense.

The issue was that, with me developing the first several sites on my own, it was incredibly monotonous for me and not scalable. It's not that fun to create and organize content for a website about "blue ski boots." but working with our team and maintaining them is what IS fun.

Joe and I collaborated closely to recreate what I had been doing and to dissect it into manageable pieces. Then, utilizing the previously mentioned skill transfer method, we arranged our team members around the process according to their skill sets, distributed the component parts to the appropriate teams, and scaled it up.


We were able to take a process and increase the number of sites it produced from 40 in the first month to 2,700 in 22 months. (More than 4 sites each DAY!) The truth is that if I had continued to develop each site individually, it would have been entirely unprofitable. (At least not at a wage per hour I would consider viable) It involved the development of the human machine through the transfer of skills.

There are 5 main steps that are critical when building out a human machine:

  1. Do It Yourself First - It's crucial that you are familiar with the project and your work so that you can start figuring out best practices, timing the different processes, identifying the skill sets needed, etc. Too many people attempt to outsource jobs that they haven't fully developed, and this almost always leads to failure.
  2. Document it - Screenshots, screencasts, and other visual aids are helpful in addition to textual instructions for each step that must be taken. Keep in mind that different people learn and remember information in various ways, and that using a variety of methods to record the process will be helpful when transferring skills.
  3. Ensure Profitability - If you do it alone, you might come out even or even in the red, but with a little quick arithmetic on a napkin, you can be sure that the project will turn a profit when scaled out. Scaling an unsuccessful project is a very costly error to make.
  4. Componentize – (Is that a term, exactly?) Give your procedure to teams or professionals who can handle the tasks quickly and in manageable pieces.
  5. To scale the process efficiently, use the steps of skill transfer (Explain, Demonstrate, Practice, Observe, Feedback). Don't forget to set up reports on effectiveness and quality so you can see how your company is growing and swiftly fix errors.

The integration of creative work into our human factory will be our next challenge. This will need upgrading our talent pool, and it will be a lot more time-consuming and challenging procedure than it was for our early niche sites. Some of our specialist site strategies were killed out by the EMD Update, but our overall strategy and objectives remained the same. We'll need to modify our equipment and start the procedure over from scratch.

Our objectives over the upcoming months: Improve websites made for tiny and mini enterprises, continued openness to strategy and methods, Improve our income streams and monetization tactics, Update our writing to better reflect our outsourcing business

A HUGE thanks to Dan and Ian from the Lifestyle Business Podcast for inviting us out to the DC Bangkok meetup and to John DeVries for putting together an awesome slide deck!

So…what did you think of the presentation? Let us know in the comments below! We’ll be putting some pictures of our trip up on our Facebook page in the next couple of days so feel free to check that out as well.

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