Come Up For Air, with Nick Sonnenberg – Episode 422 of The Action Catalyst Podcast
- Posted by Action Catalyst
- On April 4, 2023
- 0 Comments
- author, Business, CEO, consulting, efficiency, entrepreneur, productivity, success, Time Management
Nick Sonnenberg, entrepreneur, Inc. columnist, guest lecturer at Columbia University, and founder & CEO of Leverage, a leading operational efficiency consultancy, talks about buying time at a discount, getting a 2 minute notice from a partner, effective vs efficient, why every team should think about CPR (Communication, Planning, and Resources), sorting information like laundry, the RAD concept of email (Reply, Archive, Defer), and more tips to reclaim your day from his new book, “Come Up For Air”.
Nick Sonnenberg is an entrepreneur, WSJ Bestselling Author, Inc. columnist, and guest lecturer at Columbia University. He is the founder and CEO of Leverage, a leading operational efficiency consultancy that helps companies implement the CPR® Business Efficiency Membership outlined in Come Up for Air. This is the culmination of Nick’s unique perspective on the value of time, efficiency, and automation, which stems partly from the eight years he spent working as a high-frequency trader on Wall Street. The CPR® Business Efficiency Membership consistently results in greater output, less stress, happier employees, and the potential to gain an extra full day per week in productivity per person—just by using the right tools in the right way, at the right time. Nick and his team have worked with organizations of all sizes and across all industries, from high-growth startups to Fortune 10.
Learn more at ComeUpForAir.com or GetLeverage.com.
The Action Catalyst is presented by the Southwestern Family of Companies. With each episode, the podcast features some of the nation’s top thought leaders and experts, sharing meaningful tips and advice. Learn more at TheActionCatalyst.com, subscribe below or wherever you listen to podcasts, and be sure to leave a rating and review!
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(Transcribed using A.I. / May include errors):
Adam Outland: Hello listeners and welcome to the Action Catalyst podcast. I’m Adam Outland, your host, and today we get to interview Nick Sonnenberg, entrepreneur, founder, and CEO of Leverage, a leading operational efficiency consultancy, which utilizes Nick’s unique perspective on the value of time efficiency and automation.
So yeah, thanks for joining us, Nick. This is really exciting. You’ve authored “Come up for air”. So we’ll be talking a lot about your book today, but you know, part of our audience really loves to hear the backstory of folks too and how they got to where they are. And I know a little bit from your bio and obviously the, some of the pre word in the book that you, uh, started in trading. Is that right?
Nick Sonnenberg: Yeah. I was a high frequency trader for eight years on Wall Street.
Adam Outland: For people that don’t know, what does high frequency trading mean?
Nick Sonnenberg: So my background’s in math. I’m a mathematician and financial engineer by background. So if I was developing algorithms to trade stocks at very high speeds, like we’re looking at nanoseconds and microseconds, trying to capture fractions of a penny, and I would trade billions and millions of dollars a day just purely based off off of my algorithms and math formulas.
And so it was fully automated. I knew nothing about the companies, and it was really just trying to take into account some mathematical theoretical discrepancies and anomalies in the markets. It was in this space that I really developed a, a real appreciation and, and muscle for automation as well as the value of time.
Literally, a microsecond could mean millions of dollars in that space. So I really developed an appreciation for even if I could shave off a microsecond in how my algorithm worked. That can make a massive difference. And so now what I do, which is, you know, efficiency consulting, and that’s what my book is about, I’m looking at it from this lens of micro improvements, frameworks, systems.
You know, you can tell that a lot of my content comes from someone with an engineering background.
Adam Outland: The way you organized it. Very engineering minded. But before we dig into that, I wanted to hear how does one even decide they’re gonna take this path in life? Like who were you as a, a high school and college student? Did you always know you wanted to go in the trading and the business side of things. Share a little bit on that.
Nick Sonnenberg: I’ve always been obsessed with, I’ve always been good at math and I’ve always been obsessed with. And so, you know, I studied math in undergrad, graduated early, not to brag. It was more just, I was efficient.
I figured out a way to tackle multiple general education courses at once and you know, I was really efficient at how I studied. So I did well, graduated early, went to get a master’s in financial engineering from Berkeley. Different companies came and started interviewing and I didn’t even know about high frequency trading.
I kind of fell into it and, uh, it seemed perfect. I like chess. I used to play poker about 50 hours a week in undergrad. It kind of paid for my undergrad. So I liked all those types of things. So when I kind of learned what this is, I’m like, wait. So to me, the stock market’s just a big video game anyway, kind of.
So it’s like, wait, I can kind of use like all of my skillsets in one. So I did that, did really well. I, you know, my mid twenties, like I was living in the Four Seasons in Hong Kong making seven figures, but I wasn’t really happy. and for a multitude of reasons, decided to take the leap and create my own company.
I had an idea for a startup and I had an app that was a, a scheduling app that I first started with, Calvin. And um, so I’ve always been in the space of productivity and time savings to some degree. You know, I really believe that time is our most valuable resource. If I can give people back X hours a week, you know, or save in the world millions of hours, then I’ll have made a big impact.
That’s my, that’s my mission. And so after Calvin, I. Launched leverage kind of randomly as a side project. And at the beginning it was a freelancer marketplace, so we were doing tasks and projects for people, but still we were selling time. You know how, how can people buy time at a discount? So we were still in that space, but what ended up.
Happening was one, we scaled very quickly. We scaled to seven figures in the first year, 150 contractors on the team, fully remote, basically every time zone. We bootstrapped too. We ne we never raised any money. So a lot of people find that impressive and you know, that that is a hard thing to, to achieve.
But under the hood we made a lot of mistakes. And what people don’t realize is, uh, we were, you know, in a lot of debt, losing a lot of. Literally the team didn’t know who I was. You know, we would split the org chart up where my business partner was head of people, and I was head of non-people. So all the clients and team knew him.
Basically no one knew me. Wow. And so one day we’re having coffee in 2017 and he taps me on the shoulder and he says he’s leaving. Not in two days. You would expect two weeks notice. I get two minutes and he’s out. And so during that moment, I go white. I’m like, we’re gonna go. . And in the coming months what ends up happening is it was pretty tough.
You know, I was, you, you could say drowning. In work, we lose about 40% of our revenue, and before I know it, I’m cashing out my 401k. My dad’s taking a second mortgage on his house to make wow. To loan money for payroll. You know, if you think living in your parents’ basement’s bad. Driving them to the bank to sign documents for equity lines.
So I know what it’s like to have success as a trader, have success growing a business. I also know what it’s like to have setbacks, and it was during this time I had to make the decision, do we bankrupt the company or do I try to re navigate the ship? And ultimately I did see a path to cleaning some of the things up and making it more efficient.
And so the things that I was working on did start working and. Simplifying the business, making it more profitable. And simultaneously people started reaching out to me, asking me to consult them.
Adam Outland: At some point, as you’re asking your dad to get a second mortgage, he’s volunteering that and going through it. I mean, that’s tough. Yeah. And you knew what it was like to make seven figures. I mean, I could, I could see if you’re like the college student that’s still eating ram and then you don’t know any different, but like you definitely knew different. Was there a moment where you were like, this is for the birds. I know how to trade and make a lot of. Um, why don’t I go back and do that?
Nick Sonnenberg: I really believe, I think that the, I’m sitting on a really big opportunity here in terms of there’s such a need for operational efficiency in the world. There’s all these new tools. No one’s ever been taught best practices of winner, how to use it.
So, uh, I always just thought that this space that I’m in is actually a bigger opportunity than trading. But what happened was, as leverage back then was starting to get more efficient and become more profitable, People started reaching out, asking me to help them, and I worked with RI or Small Financial Advisors or Ethereum or large Fortune 10 companies, and everyone had very similar issues, which is why I decided to stick it out, because I could see the impact we were making, the niche that we were in.
The people who got rich in the gold Rush weren’t the ones looking for gold. It was ones that sold the shovels. And there’s tools like Slack and Asana and all these tools. No one’s ever been taught best practices until us, and so. . I ultimately, you know, I’ve always been confident that kind of once in a lifetime opportunity to really create the foundation for how every business in the world and every team in the world should run.
And I wanted to be that person, which is why we pivoted leverage from being a freelancer marketplace to being a, you know, world class training and consulting company on best practices for how a team or an organization can be efficient. And that’s also why I wrote the book.
Adam Outland: Yeah. You’ve really exercised your muscle of efficiency in everything you’ve done. The mathematical background, all of that made sense to you. Building a business requires all these other things too. What was it like exercising some of those other com, like communication and like getting people to understand your story? I mean, was that a big learning curve at the beginning?
Nick Sonnenberg: Yeah, it was super tough.I mean, my background, I’m a quant, like I spent you. 12 to 14 hours a day with headphones on, thinking really deeply for sometimes months , like hardly talking to people. So yeah, like jumping into startup space, I, I was maybe cocky maybe is the right word at first, thinking, you know, high frequency trading is so complicated.
Nothing could be that hard ever. It must be a walk in the park. But you know, as you know, very much, well, you know, running a business is a different animal. You have to deal with people’s personalities and how do you motivate them and how do you compensation packages and. What’s your product or service that you’re offering?
How have you packaged that and priced that and so on and so on and so on. How’s your marketing? How, how are you getting customers? Who is your customer? What’s your branding? There’s so many different things that, you know, we’ve always been efficient. And ultimately we pivoted to moving leverage to be an efficiency consulting company cuz we were always so strong under the hood with how we operated.
That it was like, why don’t we just make what’s under the hood? Also what’s outside of the hood since like we’re already living and breathing this stuff anyway, kind of cool, really cool. And it goes hand in hand with your stuff, right? Like you need to be effective, but you also need to be efficient, which is doing things right.
So you do, you definitely need to know how to speak to a customer and have a sales strategy. , what would an extra five to 10 hours a week give you for your sales, you know, in your top line? Like if you could just wave a magic wand and everyone on your team had an extra business day that they can now go and do sales or whatever you want ’em to do, like what would that do to your revenue?
So it does go hand in hand. If you give people back more time, they can then go and do more sales or whatever activity, you know, you want them to.
Adam Outland: Yeah. The c p R framework is a big part of your strategy and approach to this. Under that, you have a part of that chapter called More People More Problems.Talk to me about what that means and how you uncovered that.
Nick Sonnenberg: You know, if you’ve ever managed a big team before, it can be complicated Complexity scales exponentially with team size, and in the book we, I, I show some graphs on how. But every person you add adds exponential complexity, exponentially more ways that infor information get lost, misunderstood, so on and so forth.
And so most people, when they want to increase their capacity, they think we need to hire more people. That’s the knee jerk reaction. And usually it’s the most expensive and worst approach to increasing capacity. If you think about just all the costs. , you’ve gotta pay for recruiting, onboarding, training, then you gotta pay a salary.
Then you get this exponential complexity thing, you know, the more people you have to manage. It’s not that you’re getting, you know, 40 hours of pure productivity outta them. Like there’s a lot of slippage so often. I’m sure I’ve been there. I’m sure you have too. You hire someone thinking it’s gonna be the, I just need to hire this one role, and like my life will change, and you hire them and you’re still just as busy and just as drowning in work.
Hiring usually is the last resort, but most people utilize that strategy as a first resort. The second way is you, you tell your team just to work harder, work a hundred hours a week or whatever. Turns out people don’t love that one. Yeah. Uh, there’s friction, burnout, culture impact, people quit. And the third way to increase capacity.
Just be more efficient. What are the activities that add zero value and just suck your soul Going on a scavenger hunt, looking for something that’s disorganized, having to look in 10 different places to stitch together the story of, you know, what’s the status of that client? , you know, if you could just simplify that and get any answer you need in one or two clicks without bothering people, all that time ends up adding up to about a full business day.
We’re seeing and, and now you can have a less stressful and more impactful career doing more interesting things that will add more bottom line.
So what we found is you could be a six figure financial advisor. You could be literally one of the top 10 tech companies in the world that we’ve worked with.
There’s three buckets. It turns out that every team needs to be thinking about from like a core operations. And so CPR is that core and it stands for communication, planning, and resources. And so the example that I use, Imagine you were gonna take your team camping in the forest. We’re going through recession.
So maybe instead of a team retreat at a hotel, now you have gotta go to a forest. Okay? So imagine for a second you’re on your team retreat in a forest. Like what would you need? You would need maybe a manual for how to put the tent together and what to do if a bear comes. You would need walkie talkies to communicate with each other, and you would also need a map to navigate out of the forest.
So those are kind of the three distinct tools that you would need on that team. . Same in in your team and in your business. You need to communicate both with your team and with your clients and your vendors. There’s different tools for internal communication and external communication. You need to plan, like no matter what you do, you have tasks and projects and work that needs to get done.
You should be able to click one button and know What’s Nick working on today? Click another button. What’s the status of this project? Click another button. What did I delegate to people that hasn’t yet gotten. Those things in 99.99% of businesses are not one or two clicks away. It’s many, many back and forth messages and frustration and like, yes, most of the time you can’t even get to the bottom of it.
And then lastly, you have resources. Like you’ve got your, you’ve, you’ve got digital knowledge, you’ve got intellectual property, you have your SOPs, your processes. How you do payroll is something that is, that is intellectual property to your business. What your sales process is, you know what your sales scripts are, what your core values are.
This all needs to be documented and easy to retrieve. And so, You need different tools to put things in these buckets, and in your personal life, you’re already doing this, right? When you do your laundry, you don’t just take stuff out of the dryer and stick it into one drawer. You separate your socks in one drawer and your underwear in another drawer, and you take the time to do that, not because it’s the fastest.
But you know, tomorrow when you need to put an outfit together, it’s faster to retrieve. And so it’s the same in business. Instead of clothing drawers, you’ve got information drawers and different pieces of information belong in different drawers.
Adam Outland: I love that. Instead of you having to onboard every single person, there’s a systematic approach to helping them get up to speed.
Nick Sonnenberg: If you do something more than once that you don’t like doing, you should be thinking, how do I figure out a strategy and never have to do it?
Adam Outland: Amen. We had a conversation with a client where we were talking about the value of his time down to the second or the minute, and we just reversed. We didn’t reverse engineer all 40 hour work weeks. We actually only reverse engineered the income producing activities of this person, right? The things that actually generate revenue, what they’re most capable at, and we divided the incoming annually by that, and it was something like $2,000 an hour that this person’s time was worth. And then how much are you billing the company for you to do these activities that are really not worth your $2,000 an hour rate? And that’s a lot of what I feel like you solve in these tools is how to address that.
Nick Sonnenberg: And it’s also culture impact too. Trust comes in many forms. You could, you could trust me that I’m ethical and I’m not gonna go and steal money from your bank, but you might not trust that I’ve got my crap together and if you ask me to do something, then I’m gonna deliver it on time. And so it’s one thing that we’re freeing up a business day a week that you could then go and do stuff with that will add more bottom line. But this is gonna increase trust.
You’re gonna be able to trust. that you could tell someone to do something and then it’ll, it’ll actually get done. Hmm. Right? You’ll have more transparency, more accountability, so your culture is gonna go up, your stress is gonna go down. So there’s so many additional benefits beyond just free up time that’s gonna help you make more money.
Adam Outland: I was awful at everything that you’re good at. I’m so opposite from you in strengths. Math was not my thing in college. I needed like a tutor to help me get through statistics, like he was bad and organization and, and being on time for things. I was in college, the absolute worst, Nick. I mean, you would look at me and say, you need therapy for time management, and I picked up a book called Getting Things Done Way Back, right?
Nick Sonnenberg: Yeah. David Allen’s a. . Well, good friend. He’s a, he is a friend.
Adam Outland: Yeah, he was life changing. Incredibly helpful and I still like latch on to some of those personal tools and strategies and I, and I think that are universal. What I’ve struggled with lately that I loved in your book is the attention you spend to modern technology tools like Asana or Loom or even like the Inbox zero concept. I mean, one of the things I was most excited to talk to you about today was email Help a Brother Out. Nick, how do we deal with email in today’s environment?
Nick Sonnenberg: There’s uh, a framework that we developed called Rad Reply Archive Defer. But basically there’s things that you can do in email. Most people don’t use email properly. It’s been around for decades. People don’t use it properly at all, and it’s usually a really good starting point with efficiency because. If you get better at managing your email, you’ll save time, and it doesn’t require the rest of the team to be on board to that R a D system and the best practices, the collaboration tools that you’ve mentioned can completely transform your business, but it does require that alignment and people need to kind of go through and adopt it simultaneously.
Otherwise, if I’m using one of those tools and you’re not, I’m gonna get punished for trying something new because I still have to work with you in like the old way. So now I’ve just gotta look in another place. So with these other tools, you kind of have to coordinate that people adopt it. Email. You could be a team of 10 and put three people through email and it’s totally fine.
Those three people will get benefit and the seven others will continue to be more stressed out and waste time and miss emails and miss money. By not doing it. So the most popular thing we do at Leverage is inbox zero training. We’ve got programs to teach people how to use email properly. It’s one of the most popular and impactful programs that we’ve ever released, and it’s, you know, one of the best investments that we see people can make as simple as teach someone how to use email, like depending on volume, it might save ’em three hours a week, five hours.
Adam Outland: One of the things that you talked about is that there is internal communication, which should go to in modern age with these extra tools to a internal communication tool, and that’s what you were just referencing, right? Like talk about Asana a little bit. We use that internally. How did you come across that as a, a tool and, and how has that helped you personally?
Nick Sonnenberg: Our job is to kind of know what’s out there and know the pros and cons and stuff. So we’ve tested all of ’em, like Asana, in my opinion in general, as a good default is the best. But you have to know, uh, not just how to use it, but when to use it. So you have to be clear. What’s the purpose of Asana? When should, if you have to announce a new hire, do you go to Asana?
If you want, you know, a team. To write a report by Friday. Does that go to like, so what types of scenarios should you even open Asana versus email versus Slack? That’s what the book really is, is teaching you. And then you have to know some best practices too, right? When should you reassign a task?
What are best practices for the title of a task? Have you set up rules in your my task so you can automate your to. And get the automated cascading. Are you getting to inbox zero in Asana? Are you fully utilizing, you know, dependencies? And do people understand when they should use a milestone? So there’s a lot of nuance that if you don’t get right, you’re gonna only get a fraction of the value. If you do get it right, it could totally transform your, your entire company’s productivity.
Adam Outland: But it’s about how you use the tool. The tool itself isn’t gonna solve all your problems. So Nick, I mean, have you ever just like met someone that was a, just a personal disaster with their time management and you were like, this person’s beyond help. I mean, and maybe this is just you as you’re formulating leverage and all these. Tools that you have in your early days and your, you know, your friend is coming to you who’s just a mess and you’re obviously naturally good at these things, your brain is naturally thinking in terms of efficiency and there are people that just are not maybe call it naturally thinking this way. What’s your answer to that with time management? I mean, do you, do you feel like even the worst folks that are just a mess can figure this thing out?
Nick Sonnenberg: Yeah. I think different people have different aptitudes for various things. There’s some things that are just like quick wins. Some of it’s just mindset stuff, like knowing what your hourly rate is.
Just being aware of that tells you a lot. You know, if your time is worth a hundred dollars an hour and you’re doing activities that you know, you could pay someone $20 an hour to do that. Doesn’t take an engineer to kind of tell you like, Hey, you’re, you’re losing. You’re losing money here. You know, that’s, that’s one teaching email is another one.
Some of it too, it’s like, it’s not just saving time, it’s optimizing time. So like 9:00 AM on a Monday is far more valuable of a time slot than 7:00 PM on a Friday after a hundred Zoom calls for the week and you’re in the back of an Uber and you’re exhausted. And so if you could free up time from meeting.
On those high value time slots. If your time’s a hundred dollars an hour, maybe it’s worth a thousand an hour at 9:00 AM on a Monday after a relaxing weekend, after you’ve had your morning workout and your coffee, your kombucha, or whatever the hell you, you do, like maybe your brain is at full horsepower versus at the end of the week and you’re tired.
And so if you can free up 15 minutes at that nine o’clock time slot and reduce the length of a meeting. and people could record a video or send you an audio on a Friday, and now you can utilize that wasted dead time in the back of an Uber that doesn’t, again, require any complex, fancy math, you know? So it’s like, yeah, actually I never thought of it like that.
That’s a good idea. I’m gonna start doing that. And you just right away so everyone can start somewhere.
Adam Outland: Yeah, so good. One of the things that I like about your approach, Nick, is that you’re good at communicating this stuff. I’ve definitely met my fair share of engineer minded individuals that take complex things and or even simple things and make them complicated.
Nick Sonnenberg: That’s a very nice compliment. I appreciate it. The first day at grad school, um, I did a master’s in financial engineering. They said, look, we’re gonna be teaching you the same math that you would use to put a rocket up into space, but our goal is at the end of this program, it was like a one year program. If you can explain what you do to a five year old, we’ve done our job because that demonstrates mastery. If you can really articulate a complex idea in a, in a simple, digestible way, . I really take that as a compliment. Thank you. Yeah.
Adam Outland: Yeah, and I think it’s, it’s huge for the help you’re providing people with these tools is making it in a way they can understand. Just a, a few things about you. It, it’s just kind of a lightning round on this morning routine for you. Like, are you one of the folks that’s like hyper engineered what you do in the morning and it’s like always the same and anchored in, is it more like, yeah, whatever, I just want my personal time.
Nick Sonnenberg: It’s not like super rigid. I mean, I wake up all right, or maybe around 6, 6 30. I try to do a journal in the morning, like a five minute journal, you know, have my supplements. I’ll, uh, make like a protein shake that I’ll drink later, but I kind of get it ready again. Like I know that the first say 30 minutes, my brain’s not yet at full horsepower. What can I do that needs to get done that doesn’t require my brain to be at full horsepower? Making a smoothie while I’m like still half asleep. I’m awake enough to get that done and it needs, and you know, and I like to have it after I work out, so I, I get that ready.
Adam Outland: Perfect. Love that. Um, yeah, I really appreciate this great interview, amazing tools in the book. Where can people find the book?
Nick Sonnenberg: The book was 320 pages long. Harper Collins didn’t want me to go any longer and I’m an efficiency guy. Can you imagine like, it would probably been like 1400 pages if I weren’t. So throughout the book, we, we give kind of, uh, links, you know, to go to come up for air.com if they want additional resources. So we’ve got calculators, checklists, you know, deeper. Content on, on various topics. So come up fair dot com’s a website that we’ve put together for additional resources. And you know, there’s different ways that you can get the book for you or for your team. There’s some packages and then if you need additional help, uh, get leverage.com is the training and consulting company.
Adam Outland: Yeah, yeah. If you do time management therapy for individuals, I’m also interested.
Nick Sonnenberg: Great. But thanks for having me. This was a lot of fun.