Today’s episode features a longtime friend and mentor who shared an idea with us many years ago that changed the way that we thought about entrepreneurship.
David McKeegan and his wife Carrie are the founders of Greenback Expat Tax Services.
David first joined us on the podcast back in 2013, and he is singlehandedly responsible for introducing us to one of our all-time favorite concepts, The 1,000 Day Principle.
This idea that it takes 1,000 days of full-time effort to replace the income from your day job has since been dissected on this podcast countless times over the years.
David joins us this week to fill us in on the many developments in his business, to share his personal tale of an entrepreneurial identity crisis, and to discuss the lasting legacy of The 1,000 Day Principle.
See the full transcript below
Listen to this week’s show and learn:
- The challenges of starting a business in an unfamiliar industry. (8:46)
- How the decision to leave his business led to a sort of identity crisis. (18:59)
- When David first introduced us to the idea of the 1,000 Day Principle. (27:26)
- Some valid critiques of the 1,000 Day Principle. (35:52)
- David’s advice for those struggling to find traction in their first 1,000 days. (43:00)
Mentioned in the episode:
Before the Exit – Our New Book
Partner With Us
The Dynamite Circle
Tropical MBA on YouTube
Greenback Expat Tax Services
How to Get Rich by Felix Dennis
The 4-Hour Workweek by Tim Ferriss
Traction by Gino Wickman
Enjoyed this podcast? Check out these:
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Today’s podcast is sponsored by Smash Digital.
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An agency with so much link juice, you’ll need a mop and a bucket to clean it all up.
A group with actual skin in the game, ranking their own portfolio of profitable businesses, and offering the exact same services to clients.
If you want to have Smash Digital in your back pocket, check them out over at SmashDigital.com and a big thanks to Smash Digital for sponsoring the show.
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Dan & Ian
David: The hardest bit for me was just the identity side of it, who am I now, if I’m not running this business, if I’m not an entrepreneur, then who am I?
Dan: Welcome back to the podcast. Bossman, we are fair to say grinding away. How are you doing this week?
Ian: Here’s my new idea. Tell me if you like it.
Ian: We’re gonna install screen recorders on all of our systems to make sure we’re actually grinding. That’s my goal is to start really micromanaging the team on a level that’s never been done before because we are in grind mode. And I don’t see any other way. I mean, we’re fully remote. How can we keep track of everybody?
Dan: I’m terrified of what you might find. I think it’s fair to say there’s a lot of exciting work on our desks and the desks of our teams. And we’re going to continue to follow those stories in the coming weeks on this show. Today’s conversation is reserved for someone who’s inspired us and inspired so much of what’s come down on this show, an all time great hang a friend, a mentor and someone we met way back in the day with his family in Bali, where they live for many years. We’ve hung out with them in Spain, and in Thailand, and very cool hotel venues in Bangkok, DCBKK, and many other places, too. But just for fun, I wanted to roll a quick clip back from TMBA 172, which was then called the ‘Lifestyle Business Podcast’ back in early 2013. So over seven years ago, and guess what I was talking about?
Clip from TMBA 172
Dan: Ian, today we’re talking about one of our favourite topics. So let’s just jump right into it with our good friend, David McKeegan. All right, so David, in my mind, you’re famous because you presented to me this idea of the thousand day principle, which is the working title of the book that I’ve been struggling with for the past few months. So I’m curious, could you give us sort of an overview of what inspired this idea of the thousand day principle?
Dan: Get a load of that Bossman, seven year ago I was working on the very book we’re working on now. Ironic that it’s taken me a bit more than a thousand day to get finished with the book about the ‘1,000 day principle’. And hey, we are going to get to this theme later in the episode so if you’ve got problems with this thousand day principle, trust me, you’re not the only one. Want to throw any additional shade at me about that?
Ian: No, I think you’ve been shaded enough. I’ll let the clip speak for himself.
Dan: Anyway, enough of that, I invited David back on the show to reflect on some thoughtful critiques we’ve received on the ‘1,000 day principle’, a rule that he coined, and we’ll get into why, but first, we’re going to do a bit of a catch up since it’s been a while. And there’s been some enormous developments that have happened in the intervening years. I mean, this is an honest to goodness location independent success story, with family in tow, leading to what ultimately is two amazing businesses, one amazing family and generational wealth in the process.
Some of those developments are, you know, Dave’s co-founder and wife Carrie taking over CEO responsibilities entirely for their original Expat Tax Services company, which is called ‘Greenback Expat Tax Services’, that they started together. And then in 2016, David started a new business and the Genesis story of this you’re going to absolutely have to hear called ‘GBS tax and bookkeeping’, which helps entrepreneurs get and stay compliant with their business taxes. So we’re gonna get into all that. And at the end, the Boss man and I are going to circle back to give our thoughts about business relationships, the pros and cons of quote, networking, and a few more things. So I started out in this conversation by doing a little bit of a look back with David about why he and Carrie decided to become entrepreneurs in the first place.
David: Yeah, I think that we’ve done a good job. And we’re actually talking about this today. We took a family walk on the beach, where we live, we live in this town called Nosara in Costa Rica. And it’s got this really long, beautiful beach that’s great for surfing. And we went out this morning and took our hour and a half walk with the kids all the way down the beach. One of the things we were talking about on that walk is that we’ve done pretty well in past downturns by sort of taking actions that most people didn’t think to take, or thought were insane or crazy to take. When the financial crisis hit, and was it 2009, we were both working in big banks in London. We’re doing very well, we’re getting promoted. We’re getting bonuses, everything like that.
We saw the financial crisis as an opportunity to leave banking for a year, two years, three years without missing much. We weren’t going to miss deal flow. We weren’t going to miss the bonuses because nobody was getting any of that stuff. And so at that time, we said, we’d read the ‘Four Hour Workweek’, we had read a number of other business books, we both have our MBAs. And we said, ‘Yeah, let’s just take a punt. Let’s take a try. And we’ll give it a year. If it works over the course of a year, we can give it another year’. And if it doesn’t, we’ll just go back to the companies we work for and say, ‘Hey, can I have my job back?’ And so that’s when we started the first business. At the time, people thought we were absolutely nuts. ‘You never even worked in that industry? What are you thinking? What are you doing?’ And and now you fast forward 10-11 years later? A lot of our friends are still in the same jobs or the same industry, probably making a little bit more money, but nervous about how the economy is going, nervous about Are there going to be cutbacks? Are there gonna be layoffs, like, all those kinds of things.
And we’re living in Costa Rica, we’ve got our three kids, we’ve got two businesses that are doing pretty well, through thick and thin and just looking at these different circumstances or different opportunities that are happening saying, okay, for like, the COVID crisis, the pandemic we’re currently in, we said, unemployment is going through the roof, right now is a great time to start doing some hiring, there’s gonna be a lot of really smart, really capable people looking for work. Everybody wants to work remotely now. So let’s see if we can fill out our teams. In 2019, you couldn’t hire anybody, because everybody was making too much money everywhere else. Whereas now it’s like, one of the role posts we had out there for the Expat business, I think we had over 500 qualified candidates. And it’s like, you get to cherry pick the best people out there right now.
Dan: Well, what were you guys thinking? Because you aren’t CPAs you aren’t accountants yet you provide tax return guidance to expats?
David: What we saw was a problem in the market. And we said, ‘Well, this is something we could tackle. This is a problem we could take on. And, I think we could do it pretty well, I think we could turn this into something and make a business out of it’. And that’s kind of what we’ve done. Yeah, there was a splash of what you’d now probably call like ‘FIRE movement thinking’. We had been pretty good about saving
Dan: And that’s financial independence, retire early.
David: Yes, we were trying to save one of our salaries each year. So we had some cash saved up where we could afford to take some time off.
Dan: What were the first steps? I mean, it does feel like a stark contrast between a good job in London versus essentially a service business, in an industry that you’re not traditionally qualified to do.
David: Yeah, it was just kind of doing exciting things. It was figuring out how to hire someone to build a website. Yeah, hire a developer off. I guess at the time, it was called Elance, how it’s Upwork to build the first website, how to hire an accountant for the first time and how to test them to make sure they actually knew what they were doing. I think for that first year, I did all the customer service work. And I went up that learning curve really quickly to understand what people’s problems were, and understand the Tax Questions and how to answer them for expats. Because I was doing all that work, I was interacting with the clients on a daily basis around that.
And then I went out and I got my ‘Enrolled Agent certificate’, certification, everything like that. You build the stair step backwards, if you know what I mean. Like, if you imagine a staircase at the top of it is: you’re running a business, you’re remote, you’re independent, everything like that. But you have to make a number of steps to get to that point. And so, for us, it was a ‘ready, fire, aim’ scenario, where we started doing everything. And then we got about three quarters through, and we’re like, oh, we should sit down and write a business plan. And we kind of backpedalled and started writing out the business plan. Our oldest son was, I think it was 10 days late. And in those 10 days, Carrie wrote the first marketing plan that we ever put together for the business. So if he had been early, we might not be on this phone call. We might not be having this chat.
Dan: In Felix Dennis’s book, ‘How to Get Rich’, he writes that people in your position with a good job and a FIRE savings plan, and sort of a vision for how to achieve wealth ultimately, might not ever become successful entrepreneurs because they have too much going for him essentially. What was that transition like for you guys from a really good career versus the very basic nuts and bolts of hiring a freelancer to put up a crappy website?
David: Again with the crappy website comment. Thank you. Listener, can go back to what was it? The Lifestyle Biz podcast and hear Dan insult our website originally back in 2009. The thinking was, if we don’t take this chance now, there’s never going to be a better time to do it. The other thing we did, which I think was extremely helpful, is we got out of where we were living at the time. So instead of trying to run a startup from Central London, we were running a startup from Brazil and Uruguay. And we were getting a lot of fulfilment and enjoyment from just a travel aspect, being somewhere new and exploring something new. And that kind of offset some of those missing family and missing our friends from London and things like that. It also greatly reduced the ‘keeping up with the Joneses’ side of the equation, we didn’t have any social pressure to do things with other people, because we didn’t really know anybody at that point.
Dan: How long did it take to get momentum such that you feel like you were back to being able to live like having a good job versus like a rinky dink little company that you guys are just bootstrapping every day from your living room.
David: I would have to scroll back through old PNLs and stuff like that to see when we started doing that, but I think, probably year two and a half, we started drawing out a decent salary, something that like, fully covered our expenses at the time. Towards the end of year three, year four, that’s when we’re able to start saving money again, making other investments and doing things like that. And yeah, now we’re your 11 year 10, something like that the businesses is profitable and yeah, we’re pretty pleased with the income and everything like that that we’re getting from these businesses at this point.
Dan: It’s fair to call it wealth too. I mean, it’s not just like you’re paying the bills here.
David: Yeah, we’re able to save more than 50% of our salary at this point, at this point. Four times a year, I think about renouncing my citizenship. You can guess that’s when we’re making those quarterly tax payments to the IRS. It is, at this point, something that you could see, it would build wealth that would last us the rest of our lives, potentially have inheritance for the kids and stuff like that, if we chose to do that.
Dan: This is probably a terrible question. But how looking back at the last decade, if say you were to have stuck it out in the job? How would you compare those two different paths?
David: Well, one of the things that became very apparent very quickly, was, I used to work for HBOS. HBOS pretty much went out of business and got bought out by Lloyds, within a year of me leaving. So it became apparent very quickly that I had sort of limited upside and unlimited downside in that kind of role. Because you’ve got one employer, you’ve got one person or one entity signing off your paycheck. And you can’t really move your paycheck that much. Even if you work twice as hard, you’re twice as productive they’re not going to rise you through the ranks as quickly as you might want to be promoted, or bonused, or anything like that. Whereas, when we started the business, all of a sudden, we started getting clients from all over the world. I think our first hundred clients were in 30 different countries. And then you get up to 1000 clients, and you’re in 50 different countries, now we’ve got a couple thousand clients, they’re in all, whatever it is 200 countries around the world. If Germany has a downturn in their economy, it doesn’t have a big impact on us. If the US has a downturn, if everybody has a downturn in the economy, it has an impact, but it’s not as big as if we were only getting paid from one client or one employer.
And so I guess the idea of having a job, like one of those big banking jobs is sort of limited upside, unlimited downside, because you can get used to making a lot of money, and have it taken away in a second. You just you piss off one person, you can get fired. And that’s the end of that salary for you. Where’s the entrepreneurial route, if you’re able to spread your client base far and wide, you can have a pretty, I don’t know if it’s anti fragile, but it’s certainly a resilient cash flow stream from those clients. And the more you put into it, the more you can grow it.
And then at some point, if you have the cash flow, you can hire people to grow it for you. And then you’re not even putting as much time and energy in say, year three or four to whenever, as you were years zero through three or four, that’s when you’re really hustling you’re putting all the time and energy in. And then after that, if you’re able to reinvest that money, if you’re able to hire good people and things like that, you don’t have to be spending 60-80 hour weeks on your job or on your business anymore.
Dan: You even at one point made the decision to step down and out of the company. Can you describe the factors that led to that decision?
David: It was a couple different things. Our businesses had different transition times. We talked a little bit about the stair step idea earlier. And some of those stair steps for us have been implementing different technology platforms, different CRMs and things like that. And we’re kind of getting ready to do a new CRM implementation.
Dan: That’s, that’s a customer relationship management tool. What would be an example of one of those?
David: So, yes, Zoho I think, was the first one we use, then we moved on to Infusionsoft. And now we’re using Salesforce. And Carrie’s much better at that kind of work. She’s also much better at sort of streamlining and creating processes to help manage the business. I’m more of the duct tape and bubble gum kind of guy. Give me an idea and I can duct tape and bubble gum it together. And then eventually, I need somebody that can help put in the systems and the processes to get it to the next level.
So we were at that kind of point. And we’re also having what I call mommy/daddy issues in the business. So, we were both co running the business. And people would tell me one thing and tell her something different. And it was becoming apparent that if we wanted to maintain our relationship outside of the business and also grow the business we needed one person who could run the business. And we decided that because of the point we were at, in the business, it made more sense for her to be the CEO, and for me to come out of it.
Dan: You kind of got fired from your own company?
David: Yeah, it was miserable.
Dan: Yeah, really, I mean, you’re in the same house as the CEO. How does it go down?
David: Well, so the only thing worse than being an entrepreneur is not being an entrepreneur anymore. What happened? So Carrie’s workload went up a tonne, because she had to do her work, and she had to do my work. So that was very stressful on her and she handled it like a champ. But,that was a very stressful period of time as a result of that for her. For me, I didn’t have anyone to hang out with because it used to be that we’d both work, and then we both hang out together. Now, I didn’t have anything to do really. I was watching the kids. I was cooking and cleaning and doing all that kind of stuff. But I didn’t have the identity side of it, of being involved in a business or being an entrepreneur. I went from being an entrepreneur to being a stay at home parent. And I still don’t view myself as being a stay at home parent. I view myself as an entrepreneur, sometimes I have a business and sometimes they don’t. But yeah, that mismatch was difficult for us as a couple and also difficult in the business for her to take everything over and try and implement systems and processes where I didn’t have them before and things like that.
Dan: It sounds like a recipe for a lot of disagreements. She’s making all the money. She’s doing all the, quote, important things. And you’re cooking and cleaning, which one was deemed more important, I guess?
David: I think obviously, what she was doing was deemed as more important because yeah, she’s building the business. She’s providing for the family. I think the hardest bit for me was just the identity side of it, ‘Who am I now, if I’m not running this business, if I’m not an entrepreneur, then who am I?’ And that, yeah, like, almost immediately, I started thinking about other businesses, like other things I could do. And, trying to figure out a way forward with that. Because it was just like a very hollow thing. You feel gutted when something like that stops.
Dan: So you started kicking rocks, and all of a sudden, it sounds like you had a creative period there.
David: I started kicking rocks and stubbing my toe basically. I was looking at different FBA businesses in different niches and different that. And the agreement that Carrie and I had was that I was the primary parent now. So I was the one that had to go to all the parent teacher conferences. I had to make the lunches. I had to do the shopping and all this kind of stuff. So I was also time constrained in what I could do. It’s not like I had a full workday anymore. I had, how old are the kids at this point? Probably six, four and two or something like that. So I didn’t have a lot of time that I could put into finding something or starting something new. It immediately helped rule out a lot of different businesses. Because, maybe the learning curve was too high. Or maybe it would require travel, which I wouldn’t be able to do if I was a primary caregiver, things like that.
Dan: So what did you come up with? What was your aha moment?
David: So I don’t remember which DC event it was, but I was at one of the DC Bangkok events. And it was the last day, one of the speakers was up on the stage, telling people how they should be pitching, like, what kind of things they should be pitching and things like that. There’s 300 people in the audience or something like that. The speeches over and he says, any questions, so immediately, I shoot my hand up, and I start pitching him on our expat tax services, because he’s an entrepreneur, an American that was living overseas. In front of pretty much everybody there, the whole 300 people from the DC, I get shot down, yes, smoke, flames crash, burn, whatever you want to call it. Which obviously doesn’t feel good. But yeah, these are the things you do. So I didn’t think much of it. And a couple months later, I get an email from the same speaker. And he says, ‘Hey, do you have time for a quick call?’ I say, ‘Sure’. So I got nothing to do. I’m watching the kids running them to soccer practice in school and stuff like that. So I get on the phone with them.
Dan: You’re still nursing your wounds at this point from your collapse?
David: To be honest, it’s kind of like going through depression. Because all of a sudden, like, you’re wondering what the meaning of life is, again, yeah, you’re not an entrepreneur, you’re not plugging away creating and building and doing stuff like that. So I get on the phone with him. And he says, ‘Hey, I took a job with this company. And there’s a lot of entrepreneurs that were signing up with this company, and nobody has any idea how to do their taxes. Would you want to do some of their taxes for them.’
Dan: This is a big company too.
David: Yeah, pretty big company, Silicon Valley unicorn. And so all of a sudden, the light bulb goes off over my head. And I’m like, ‘Yeah, I know how to do that’. And I say, ‘What kind of companies are they? What do they need?’ So it starts off a conversation. I have a couple more vetting calls with this big company. And then over the course of probably about a week, I throw together a website on Squarespace. I get the infrastructure set up, I build out a CRM system in Citrix Podio that links together with Globey flow and with ShareFile and all this kind of stuff. And at the end of the week, I had duct tape and bubble gum together a business. We started taking clients about I know I know another week or two later, they sent out an email to all the people that are working with. And at the end of that first year, we did about 100K in revenue. And so then I had a little bit of cash to play with. And I said, ‘Okay, I can upgrade the website, I can upgrade the systems, I can hire some more accountants and things like that’. And because we had done this once before, because we had done all that for the expat business, the learning curve was much shorter. I knew how to do things in a different way this time.
So, for the new business, instead of hiring all US accountants, I set up a team in the Philippines, because a lot of the tax work we were doing was very repeatable. It’s the same form for a lot of the same companies, just the same information. I knew the best systems to set up questionnaires in. And I knew what questions to ask on the website so that if people don’t respond for a while, you can get them extensions and do things like that. So the learning curve was much shorter. It’s been growing very rapidly since that first year, because I had a better understanding of how to do it. And I’m also able to do it within the time constraints I have, because I’m still the full time caregiver because I built it from the start in a way that took the lifestyle components into account before it took the need for the income into account, if that makes sense.
Dan: The context for this conversation is really the thousand day principle and taking a look at it in the context of your experience in business. And I’d like you, if you could, to bring us back to that day when you first shared this idea with me, which has been very powerful for the audience and myself personally, that I heard from you first. So my remembrances is that it was a Saturday, I believe, we were hosting just a pool party at our house in Bali. And you brought us a wonderful gift, if I recall, a Balinese traditional wood carving, that you would put above the door, and it said ‘TropicalMBA’ on it, it was like such a cool gift.
And you showed up with your family. And there were so many interesting people at the pool party, like people making money in all kinds of weird and crazy ways. And I remember turning to you at some point and saying, this is 2012 or 2011, it was like, a little bit like that stage of the internet a little bit pre social media in a lot of the ways that we see it now. And I said, ‘David, why, given that this information exists that like this lifestyle is possible, why don’t more people go for it?’ You told me the genesis of an idea that someone had handed on to you, I believe, this idea that, typically, you have to take a step backwards in life, and that you had been workshopping this idea and that you had an estimation that it might take someone at least three years of effort to get back anywhere close to where the sort of success or income they were enjoying in their career.
And that the reality was most people, for whatever reason, just wouldn’t be willing to do that. And that was very powerful to me, because it was my timeline as well. And it was also this timeframe, that was both doable, like three years is doable, it’s less than college education. But it’s also a very, very long time like to actually exist through three years. And I think that that’s what resonated with me so much and with the audience so much is like, if you’ve been through those three years, you remember every single day, like you said, the only thing worse than being an entrepreneur is not being one. This idea of like, enduring through three years, and the uncertainty of it, and the brokenness of it, and the newness of everything. It contrasted for me at the time, with the notion that you’re just an idea away, or you’re just a handshake away, or you’re just an investor away, or you just the right cocktail party away, you’re just raising your hand at a conference away and like this idea that you share with me at the pool party was like, ‘Yeah, what, you need all of those, then some more, and then the three years’, and I was like, ‘Hell yeah’.
David: So a couple different things. The first time I ever heard the concept was in September 1997. And I was dressed in a very nice suit, wearing a tie, wearing very uncomfortable black leather shoes, waiting on a train platform for my first day of real work after college. And I bumped into a friend’s dad who was on the train platform. And he looked at me and he smiled. And he says, ‘Is this your first day at work?’ And I said, ‘Yeah’. He says, ‘Well, congratulations, you only have 10,000 more’. And I looked at him, like, ‘What?’ And he says, ‘The average person works 10,000 days, so you can start ticking them off right now. This is your first of 10,000’. And when you think about that 10,000 days, it’s about 40 years, it’s a 40 year career.
So that was the first time I had heard this kind of thing put into any sort of frame or any sort of point of reference. Later, I had heard from somebody that in your career, if you’re not moving up every three years, you should move out. So if you can’t get a promotion every three years, you have to find a new job. Because three years or about 1000 days, is how long it should take you to attain the skills or the knowledge to move up to the next step. When you take that out of a corporate environment and you start thinking about it in the entrepreneurial world. It’s pretty similar, right? So what I’ve seen, what I’ve experienced, what I’ve been told by other people, is that the first year, you’re getting the ideas together. And then in order to get back to a similar salary, like something close to what you used to be earning, you then need to have everything put together, you have to have it all working and then you have to be able to accelerate it, you have to be able to push on it and get it to grow faster, the marketing, the sales, the support, whatever it is for your particular business, to try and get that to grow and build, so that you can start getting the revenue in.
To do that, take some time, especially like our businesses are seasonal businesses, you could have the best marketing in the world and if you are doing it in November, and December, nobody cares, because nobody’s trying to do their taxes in November and December. Whereas, if you have a bad April, that can be a bad year. So the thousand days or three years, four years, that’s how long it’s gonna take to first year, at least in our experience, first year, all the money you make in the first year just gets dropped back into the business. And that’s what we’ve done with both the businesses we’re running now. The second year, you’re dropping most of that money back into the business or you’re starting to hire people so that they can do things and free you up to do other things. The third year, if you’re lucky, you can start taking some money out of that business. If you’re unlucky, you’re still trying to hire, you’re still putting it all back in so that in the fourth year you can start taking some money out of that business.
Not a lot of people can go three or four years without making money. We were able to do it because we had good jobs. And we were smart about saving. And we also moved somewhere that was pretty low cost, we moved to Indonesia. We were able to maintain a pretty high standard of living. While not making a whole lot of money or while living off savings. I think, the thousand day principle, like, we’ve joked around before saying that ideas are free, anybody can have an idea. Somebody has to put a lot of energy or a lot of effort behind an idea to get it to turn into anything. It’s never just, ‘I was at the right cocktail party. It’s never just that I met the right person here, I met the right person there’. They’re like, yeah. Our second business, yeah, I met the right person. And he remembered me six months later, kind of thing. But there was a whole lot of effort that went in on the back end to turn it into what it is now, in order to get it to a point where this year we’ll work with, like, 2500 clients and I’m hoping that that will nearly double for next year.
So, the effort timeframe, I think is what the thousand days is, you’ve got to be putting in it, maybe it doesn’t have to be full time effort but you’ve got to be putting in either full time effort or very strategic effort in order to build that up over that timeframe. And then I think you hit another step change, when you get past that thousand day timeframe, when you start having more free cash flow in the business if you’re then trying to pursue the ‘Four Hour Workweek’ idea, then it’s about getting a management staff in there and training the management staff and doing if you follow ‘Traction’, the integrators and directors of operation, things like that, so that you have a little bit of bench strength that will help get you out of that business.
Dan: I’m curious, if I can toss some objections to or concerns about the thousand day thinking to you and see what your response would be. The first is that most businesses aren’t successful.
David: Yeah, we’ve had unsuccessful businesses. I think one of the one of the phrases you’ve used before, is the idea of ‘Rip, Pivot and Jam’, right. So if you’ve got a business that’s unsuccessful, you’ve got to think, Okay, well, why is it unsuccessful? Or what are we not doing that the clients need or want, and then you can try and pivot into something else and try and put your effort into something else. Our original business model has changed dramatically from when we originally launched it with the Expat business. Because as we started doing it, we realised it wasn’t going to be successful in the format that we had originally envisioned it. Our original marketing plan, like that we wrote out in the business plan was to target Americans that were going to MBA programmes overseas. That’s how we thought we’d get to our first thousand clients. We never ever bothered doing that.
Dan: I’m reading some objections that listeners have sent in it’s a form of survivorship bias. I think that that’s fair enough. Yeah, it is. And I’m wondering when you mentioned this idea of like, you’re not gonna make money from your business. I thought, ‘Oh, there’s exceptions to that agency folks will make money from their business’. And I’m wondering, does this principle apply to agencies in the same way that it applies to businesses that are a little bit more systematic?
David: I’ve never run an agency business. I’ve got friends that have, what I’ve seen is with people running an agency business, they can make money right away, but they’re trading their time for that money. So they’re the one doing the work for the client. They’re the one either building a website or putting the marketing plan together, whatever kind of agency they have. Their time is going into doing that. If they start going the other route, trying to hire that out, trying to bring people in to run that business for them, I think you probably, their salary starts going down, because they’re paying other people to do that work. And you’re probably looking at more of what we’re talking about, like a thousand day principle, in order to get back to where their salary was before they started being an entrepreneur.
Dan: A lot of the critiques revolve around this idea of false certainty, false hope. I think there’s this idea that I’ve purported this principle on the show as, ‘All you gotta do is like, get through your thousand days, and then you’ll be golden’. But I think we both realise that that’s, not even close to the case. I mean, do you have a response to that?
David: You can run into all sorts of unforeseen problems, right? And you could have a change in legislation that puts you out of business, the product or service you’re trying to sell could become illegal for some reason, you could have an event business and have COVID happen and all of a sudden, you’re not having events anymore. Some of that you can try and prepare for or think about in advance, if you’re doing risks and opportunities and things like that, trying to understand where danger lies on the horizon, maybe you’ll foresee some of that, and you can come up with alternative plans. There’s also the risk that you could be two and a half years into something and just have it slammed shut in your face. But hopefully, if that happened, over the course of that two and a half years, you’ll have gained some skills, you have gained some knowledge so that if you try and pivot into something else, you will be able to accelerate that. So instead of it taking two and a half years, maybe you can get up that learning curve in six months for a new area, a new topic. That’s certainly what the second business we’ve got. Because of the knowledge I gained in the first business, I was able to move very, very quickly in the second business to get things set up.
Dan: I’m tossing some difficult questions at you, and I appreciate it. So we’re gonna wrap things up. I got one final question. I feel compelled to point out one observation, which is, one of the critiques was maybe replacing your income from your job doesn’t represent a success, like, that’s not a high enough bar. And I think, the way you’ve spoken historically, and the way you’ve behaved represents that you believe that too. In a way, like, the goal was never to have a job, the goal was never to trade, trade your time for money. The goal is to trade your time to own an asset that has its own intelligence, its own momentum. And part of the reason I think that what I’ve learned from you over the years is you’ve always been very systematic in your thinking. And even in your personal financial life, you share with me so many wonderful nuggets over the years of how you think about your finances in systems, you think about your business in systems, you even think about what kind of lifestyle you guys wanted to enjoy as a family in systems, these things were never really random for you. Of course, they’re random in reality, but you always have shown me ways that you can think about, like frameworks that you can engage in these complicated things. And to me, that’s like the heart of an entrepreneur, ‘Hey, this, this is a system, let’s tweak the system here’. I don’t know, that’s just an observation from the outside and also a recognition that I’m not positing the thousand day principle as like a truth in life. I mean, it’s like you said, ideas are free. It’s just an idea, right? It may very well not work.
David: It’s like a rule of thumb, right? It’s a heuristic, if you will. It’s not gonna be true for everybody. Some people are gonna get up that curve in 200 days, some people are gonna take 2000 days. Just from experiences that I’ve had, I think experiences that you’ve had and experiences we’ve seen other people have. That seems to be about how long it takes to get up that curve. It was Malcolm Gladwell, his book, ‘you need 10,000 hours to become an expert’. Well, 1000 days is 8000 hours, right? So you’re not a complete expert, but you’re pretty far up that learning curve after 1000 days. So, if you’ve really committed and you’ve been able to do the learning and do the work, put in the energy to do it. Even if you don’t have a successful business at the end of those thousand days, you probably have a pretty good talent stack under your belt that you can pivot into something else, and hopefully accelerate that thousand days somewhere else.
Dan: First off, Dave, I want to publicly thank you for being a mentor and like a driving force behind this podcast, it’s shocking to me that you’ve only been on twice. But the amount of interactions we’ve had cool hangs, philosophical discussions, and, and you’ve really inspired a lot of what we’ve talked about on the show. So thank you for that. And I know you’ve been listening for a long time, is there anything that you would like to say to those out there in the audience that are struggling with finding traction in their first thousand days?
David: I think it’s just about trying to learn as much as you can as quickly as you can. The big advantage I have is, my wife is brilliant. And she can read about 1000 times faster than I can. So she’s read every single business book ever written pretty much. It’s been very fortunate for Carrie and I as entrepreneurs to have each other because you’ve got a mastermind built in right there, you’ve got people you can talk to about this stuff and bounce ideas off. And then also reaching out beyond that is really helpful as well. I’ve done some of the DC mastermind groups. I’ve attended the events with mastermind groups in them and things like that. Just getting other people who are in business talking about business together can be super helpful, and really help you avoid mistakes or help you get up that learning curve faster. So, if anybody out there struggling or trying to figure out why it’s not working, or what they can be doing different or better, what I would say is, the best thing you could do is try and find a mastermind group and just start talking to other people, ‘Where am I going wrong? what’s not working here?’ It’s almost like crowdsourcing, the ideas, and then implementing them and seeing if they work.
Dan: Appreciate it, Dave. Well, thanks for joining us on the T MBA podcast today. We appreciate it.
David: My pleasure. Thanks.
Dan: Shout out to our good friend David McKeegan for being a great friend and mentor over the years. In fact, I just got off an hour long call with him in the fam, we were talking about business with guys that don’t even have double digits on their age yet. I mean, these guys are running real businesses making investments in each other.
Ian: Double digits, you talking like nine year olds?
Dan: I’m talking about six year olds here that are selling shares of their businesses to investors. How cool is that? David has not only shown us the ropes, so to speak in business, but his impact does not stop there. Put it that way. So kudos to David for spreading the good word, for inspiring us. And yeah, for helping us to put together this week’s episode, check out ‘Greenback Tax Services’ if you want to see what David and Carrie are up to. Very cool stuff, I thought we’d touch on a few topics here. First let’s talk about the thousand day principle because it’s an ongoing conversation here. It’s something that a lot of listeners have been emailing us about. And it’s something that Dave is the one who plopped it on our front patio in Bali and said, ‘Hey, look at this thing’. And because it was so early in the day, Ian, every time we do an episode about the topic, or write the blog post, I don’t think to do the classic list of caveats. And I think it makes sense, one of these ideas is like, that’s kind of a meta idea. If you think that the purpose of the thing is just put in your thousand days, and then something’s going to happen, as if it were exactly like going to school. Just pay us this money and show up to your desk, and then you get the degree. Well, I certainly didn’t want to give that misunderstanding about the thing. The caveat very much is like, ‘Hey, like, this isn’t a formula for success. This is typically one of the preconditions for it’. So in other words, it’s going into the woodshed and sacrificing for years for your business is often a necessary component on the wealth journey. It’s certainly not sufficient. And I think that’s a caveat that I don’t take the time to roll out every time we talk about the principle and it has been the number one critique of the audience.
Ian: Yeah, that’s interesting. I guess, you might think that it’s just a given right, that you’re gonna have a business at the end of the thousand days. I guess the way that I have kind of always interpreted it, Dan is like, at the end of the thousand days, you will have 1000 days of experience. And that thousand days of experience, a lot of times leads to a successful business, if you’ve been practising business for eight hours a day for those thousand days. So, for me, it’s no different than like touching a soccer ball or riding a bike or surfing a wave. If you do that for eight hours a day, there’s a good chance that you’re going to be a professional at the end of those three years, depending on your physical abilities. Now, I think it’s kind of the same with business. You might not have the same business that you started with at the beginning, you might need to acquire a whole bunch of new skills, you might pivot into a new industry, that requires another thousand days to really get rich. But it’s a baseline. It is a prerequisite. And it is a path.
Dan: I want to say I appreciate David sharing the origin story. That was really cool. Plus, all the listeners that have been emailing us, sharing more sophistication of how these journeys actually look. And that’s why we do this. Because, this is something – the struggle, this pain – that so many of us go through isn’t necessarily apparent when you Google around about it, and that’s part of the reason I think it’s resonated with so many, but it also has its problems. For example, you can go through 1000 days, 1500 days, 2000 days, and you can have a really mediocre business on your hand, something that maybe doesn’t look much better than that job you were trying to escape for five years. And meanwhile, you’ve sacrificed a lot on the career side. So I do appreciate people bringing up those instances that challenge the narrative and force us to look at what is supposed to be ultimately useful, not just a case of survivor’s bias.
Ian: I’ll add this too Dan, during these thousand days, I think it’s just absolutely critical that you get yourself in a group like the DC, the Dynamite Circle, because you get that opportunity to see what it’s like to have the types of successes that you’re looking for. So yeah, if you do your thousand days, and you’re all alone, and by the end of it, you don’t kind of have what you thought you might have, there’s a good chance because you couldn’t like see somebody else, at least this is how it works for me.
Dan: This idea of the thousand days, right? It’s interesting, and it’s a counter narrative to so much of what you see people peddling online, but it is very superficial and thin. In other words, this fact that you spent three years engaged in a particular practice doesn’t say much about how you engaged in it, what your aims were, who your peer group was, what your specific goals were, how self delusional or open minded you were to, how hard you worked, how brave you are. It doesn’t address, in other words, all of the important stuff. It’s a precondition, it is a basic idea. And I think that’s what so many folks are pointing out, which is like, ‘Hey, all your hard work is still ahead of you should you choose to go on this journey’. You still got to grow a great business, not just a mediocre one, you still got to make a lot of money, not a little bit of money, you still got to have a successful product not a failed product. And I agree with that critique – you choose this and all your hard work is still ahead of you, you still got to be successful. And I think that’s not completely obvious. If I’m being completely generous, it’s like, of course, like, the theory is obvious. But whether or not you’re going to be successful, that’s not obvious.
Ian: In traditional careers, and traditional education and training and things like that, there’s this trajectory, and that is almost a guaranteed trajectory. And that’s why people lean towards it, because if I spend X amount of money on this certification, I will get X amount of job worth of money and security. And I think that that path has been well worn, and we’re starting to see that path be worn in different ways. Now, in terms of entrepreneurship, there’s actually getting to be these like defined worn paths, you can buy an Amazon FBA business from ‘Empire Flippers’ or somebody like them, you can chug along and you can make your income. You can also learn from different people how to start an Amazon business, because these tracks are getting well worn in the sand, Dan. And so I think if you wanted to say like, ‘Okay, just start a business’ 10 years ago, an online business, it was very opaque. And there wasn’t a clear path necessarily to revenue. But there are these trenches that are starting to develop, the same way that they did in traditional education, in industry, in online businesses. So you can buy into these opportunities now a lot easier than you could 10 years ago, you can see the clear path to it. I think that thousand day principle and what we’re talking about here today, Dan is a little bit more opaque still, it’s like this, ‘Well, choose your own adventure, I want to make a million dollars a year, I’m not sure what I want to do how I’m going to do it’, that’s still very difficult to do.
Dan: For sure. More on that in future episodes, just want to also point out Ian, how David raising his hand at DCBKK is a, I think, honest example of how networking can often look in real life, everybody talks about building your network or whatever. But actually, what Dave had was a resource that became visible to another powerful interlocutor, who also had a resource. And at that moment, he kind of got rejected, because it wasn’t this instant victory, but they both knew of each other, and there was some trust. And there was also like minds, and reliable connections, where, ‘Hey, we’re on the same vibe’, these are the kind of opaque things that that make communities valuable is that if you just go meet a random person, because they said they like ex hobby, the chances that you’re going to be close friends or trust that person might be pretty low. And the reason for that is social filtering is a lot more than just a label that you put on yourself. It’s a complicated process that takes a long time.
Ian: It really is, I tell people like, ‘You might be into cars, I’m into cars, but I really got to see how the edges of your tires are worn to understand if you like cars the same way I like cars’.
Ian: And David putting himself out there. I think this is just another example of doing the work in front of people. It’s the same thing with discussing your finances, and all these things that used to be taboo. Your biggest challenge is not going to be somebody who’s starting a competitive business, yours that steals your idea, it’s actually making a meaningful living for yourself and building a product that people care about. That’s the difficult thing to do. Ideas are cheap. So, David put himself out there, he let the world know what he was up to, he let them in. The risk is somebody is going to steal your idea, the real risk is that you’re not going to be able to execute on the idea and make it into a profitable business. In the meantime, if you’re short sighted, and you’re not able to put your ideas out there for other people to consume, to shoot down, then you’re not going to get the opportunity to interact with people as you’re building these businesses. And that is very important, because you can’t do it alone.
Dan: Well, I want to say, like you pointed out, one of the legitimate critiques of the 1000 day principle is, or one of the real risks involved, which is that you’re just putting in your time, you’re not actually realising the potential of your connections and your resources that sit right in front of you. Instead, you’re doing lower order things like counting your days. I also want to point out, it was really interesting to me just to highlight the decisions about who runs the business when and this idea of so many business partners are also in life relationships, and to see how David and Carrie navigated that and how he shared that with us, to me is, is really interesting, just to be conscious of that, and that is a big deal. One of the themes that comes up a lot for me, Ian, is a lot of the things that aren’t necessarily like real things in the world. Like if you can’t quantify them by square footage or dollar figure or acreage or whatever it’s like not a ‘real thing’. No, these are very real things in the world that are deeply important, and aren’t just going to show up on the balance sheet.
Ian: I was even thinking about this before we got on this call Dan, let you into my world here. I was thinking about some of the things that we got going on over at Dynamite Jobs. And we’ve got this new platform that we’re rolling out, and we’re also helping recruiting clients. And we’re also helping people that just want to post jobs driving traffic to their jobs. It was just like, my head is just full of all these things to do and all these metrics, and I was like, ‘Well, what am I responsible for and what’s Dan responsible for on the top level?’ And, these are things that we’re gonna have to discuss, because this is a new venture. And I guess, at the time, while I’m sitting here, getting ready for this call, I’m like, feeling a little bit overwhelmed. I’m like, ‘Oh, man, like, I don’t know how I’m going to keep track all this stuff. I wonder if Dan has time to keep track of some of these things’. And so, as it relates to Carrie and David, these are the types of conversations, you almost have to have them weekly and monthly, because, especially in a new business, it just keeps piling up, and you just keep trying to figure out ways to get everything done. And so, if you’re not in constant communication about this stuff, it gets to be a mess.
Dan: So we’re going to have that conversation in a few hours here, Bossman. But of course, I’ve been working on this book for about seven years. I just need a few more weeks, I’ll polish it off, and then I’ll get to helping you out with your thing. Obviously, I’m the guy to go to when we need to get things done, and to ship. Alright, Bossman, I’m really looking forward to that. We have so much more to share about what’s coming down the pike at DJ in the coming weeks. Again, thanks to David, our good friend for coming by the show, sharing his wisdom with us today. And of course, thanks to Smash Digital dot com for sponsoring the show. That’s it. Thanks to you, Boss man. Thanks to you for listening to the pod. We will be back as always, next Thursday morning. 8am. Eastern Standard Time.