Revenue Per Employee Is Skyrocketing

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Today.

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2:07

Okay.

3:12

Then you go through the years 2019, it goes down. 2020 it goes down. Right. It's closer to 200k or so. And in 2023, okay, guess what? 2022, I think chat GBD comes out.

3:12

Right.

3:21

2023, it goes up to 400k. 202024 goes up above 400k. And then now 2025, it's closer to about 750k or so. Right. And then you look at the, you know, general sizes. Let's not even pay attention to that. But the point is, if you're top 10% company, the ARR per FT is going up. And same thing with top 75%. Right. So sorry, top 25%, 75 percentile. Right. So closer to 400K. So it's kind of crazy.

3:21

It's kind of crazy. You need less people to get stuff done. I'm assuming they're mainly talking about software companies.

3:47

Yeah, I was at, I was at a poker game earlier this week and with. With a few entrepreneurs and one of the entrepreneurs was like, I thought the stuff last year when people say people are gonna lose their jobs, I thought that was overblown. But him and his, his spouse, they are on cloud code all the time on their couch. They didn't watch Netflix anymore, so they're down in the thruffle. Okay. Cause cloud code is in there.

3:52

They're now on a what?

4:10

Throuple. Throuple. Couple throuple. So you have three people in a relationship throw. Oh.

4:11

Cause Claude is the.

4:17

Yeah, yeah, yeah, yeah. So. But he's like, oh, I can see it now.

4:18

Cause I'm like getting confused on this one.

4:21

Noah. Well, he gets it. He got it immediately. So. So, but my, my point is.

4:23

I wonder why Noah.

4:26

So my, my point is like the people that were kind of naysayers kind of seeing now he's like, oh, like some of these people like have moved on. He's like, oh, I don't need to replace these people. Right. So my point of that is like, okay, 90 90th percent are doing 700k revenue per employee. I think we're going to see it go higher and higher over time. And that's both. This is why when I started the year I came in both really angry, but also really excited. Right? Really excited. Where it's like, oh, I'm going to help, you know, help my, my team get better at this stuff. Right. But on the other side, the anger piece is like, damn, like we're so screwed if we don't get on top of this. Right. So it's like a mix of both. It's weird. It's your father. You would know. Like, I kind of like you want to protect them, but at the same time like you're, you're scared for them.

4:28

So.

5:07

Yeah. So what do you think about the, the FTE skyrocketing?

5:07

You mean the revenue per FTE skyrocketing?

5:12

Yes. Yeah.

5:14

I, I, I think it's, it's, it's a glimpse of the future. I think you're going to see it for more industries into software or tech businesses that have reocc revenue. And it makes me, as a father, you know, really question the education that my kid is going to get. Because if they just go through the traditional ways, I don't think they'll be needed into corporations. Corporations will just remove.

5:15

Do you know? Yes.

5:40

Or not even hire them, but you get what I mean?

5:42

Yeah, but do you, do you know back in the day, like long time ago, how kids jumped from 50th percentile to 99th percentile when it came to education?

5:44

Parents left them on their own and let them figure things out.

5:52

No, dude, that's what our parents did. I don't know. I don't know about you. I don't.

5:54

Yeah, that's what my parents did.

5:57

Okay, maybe it did turn out well for us, I guess. But it's one on one tutoring because back in the day people couldn't afford one on one tutoring. But now everyone's going to be able to afford one on one tutoring. You know what I mean? So, so you're saying back in the day. Yeah.

5:59

They did one on one tutoring to really get their kids.

6:13

Yeah. Like you think about like the Aristocrats back in the day or even like when we were growing up, let's say even the 30s, the 50s, the 80s, the 80s, right. That's when we were growing. But I think a lot of this stuff is much more accessible now. And, you know, I don't want to get into kind of philosophies on the future here, but I think, I think everyone's going to be okay in the long term. Because if you think about it right again, this, this water bottle cost me 40 bucks. I think it's going to get. The robots are going to be making it. I think it's going to deflate to like, you know, $4 or so and then the $1 or so. So everything's going to become cheaper and then there's going to be a level of universal, you know, basic income for everyone. So I think everyone's going to be okay.

6:15

Yeah. So my son was at a playdate around less than a week ago last weekend.

6:48

So we're almost like with a bunch.

6:54

Of kids one on one. So it was another kid and them. It could be with a bunch of kids, but this playdate was just with another kid.

6:55

Yeah.

7:01

So this other kid is a little geeky and nerdy and my son is as well. And they get, they got along so well. Randomly they started talking. One started talking about optical illusions, you know, the other one.

7:02

How old your son again?

7:15

My son's four. So, you know, the other kid's same age. And then my son's not into optical illusions, so he's learning about them. This is cool. So then he starts talking to the other person about animals and facts and, you know, blue whales, blue whales or how fast they are, you know, like if I ask my son, what's the bite force of a blue whale? He's like, the blue whale doesn't have a bite force. It's not like a shark.

7:16

So you call it an idiot.

7:37

He's like, yeah, pretty much. He's like, he just opens his mouth and then, you know, krill and other types of.

7:38

We didn't know any of this stuff when we were four years old. Yeah.

7:42

And then both the kids started talking about math and then their love for math. So they're like, do you know what the square root of 64, it's not hard for adult to know.

7:45

This is easy.

7:54

But you're talking about four year olds.

7:55

Four years. I didn't know that.

7:56

Yeah, I didn't know that at 4. So they both knew the answer. Then they were talking about other, you know, math things like, you know, division, multiplication, you know, my son, I don't know the answer to it, but he's like, do you know what One plus two, plus three, plus four, plus five, plus six, plus seven, plus eight, plus nine, plus ten. And then he's like, do you know one times, two times and he's going with this. Right. And the other kid knows a lot of this stuff. But a lot of this is enabled because you could, I, I, I can't say AI. But the reality is Eric and I didn't grow up in a privileged household. We, we were, we grew up in a privileged household when it comes to love, but not financial.

7:57

Yeah, Right.

8:40

So our parents couldn't provide a lot.

8:41

Yeah. So I would say our parents were middle class. Right. And it was your mom, was your mom driving a lot of it?

8:42

Yes, but my parents weren't middle class when I was younger. They were middle class when I was like high school.

8:48

Okay, so we're the same.

8:55

We're the same. Yeah. So. But my kids grew up in a very different world. So they have chess people that come every single week.

8:56

I just say they're privileged.

9:06

Yeah, they're privileged. My financially privileged. At least we have chess tutors, one on one baseball coaches to make them better. One on one gymnastic coaches.

9:07

One on one Brazilian Jiu Jitsu.

9:17

One on one. Brazilian Jiu Jitsu. Yeah.

9:19

Every day.

9:21

He just got his gray belt yesterday.

9:21

What level is gray belt? Is that his second? Third?

9:23

Yes.

9:25

Okay, that's great.

9:26

Kids have different belts. And Gracie Jiu Jitsu. Yeah, yeah, yeah. So I think to get a gray belt it's like 40 or 50 classes.

9:27

Yeah, that's awesome.

9:34

That's a lot for a kid. Yeah. So they have everything. One on one tutors. If they want to learn more, read more, talk about, you know, stats and data. Dude, we take them to the museum. I think it was in Pasadena or by USC where you can see Spatial Endeavor, I think. Was that Pasadena? I forgot which part of LA it is.

9:35

JPL is Pasadena. Yeah.

9:55

Right.

9:56

So it's the same there.

9:57

I think they, they're able to get the one on one stuff. But the reason I bring this up is I totally agree with you in which if people had one on one help and it's adapted to what their love and their knowledge or what their love, what they love and are passionate about, they're going to learn so much better and are going do they're going to excel in it. And same with marketing. If you look at you and I, we were connecting with other marketers who are amazing that were doing this stuff that we're doing but before us and their version of it for their time because the channels are different and we learned a lot from those people. It's like one on one training and education. And I do believe it's one of the best ways to learn. And AI has now enabled it. Where a lot of people have access to this.

9:58

I honestly think so watch, then we can move on from this. But I think I wouldn't be surprised if your son or your daughter, like your son starts a business by age 6. Because I do think with all the AI stuff now, like, because at age 9, I already had a website like selling MP3s, right? And I was like reviewing MP3s, right. Had I not gotten involved with gaming, I probably would have been all in on business starting at age nine. I just didn't have the guidance and I didn't know how to double down on that. Right. You start at age 14 or so, right?

10:41

Yeah, 15, I think.

11:05

15. Yeah. But you were selling CDs to start with. Right? And so if we had all this stuff, probably age 6 or 7, we probably would have been going already.

11:06

My son has been trying to start a business now for two to three months. He actually has a really good idea.

11:12

There you go.

11:17

My wife will kill me if I say it, so I won't. But it is actually a really good idea. I was shocked that he came up with it.

11:17

Is it a rated X idea?

11:22

No, no, it's not rated X.

11:24

The way you're saying it is like such a.

11:25

It's a good idea. It's related to snacks. Okay, okay. So. But outside of that, he's obsessed with money. So he's counting money.

11:27

Where do you learn that from?

11:37

Yo. No, but it's gone too far. Every day I need $20.

11:39

That's a reflection of you.

11:42

And then he counts, and then he makes you count his money with him. And then all the. And it's like it just takes forever. And every day he negotiates. I got a gray belt. And before this class starts, if I get the gray belt, are you going to give me at least $100? No.

11:44

A hundred dollars?

11:59

He's like, okay, 50. If you gimme 50, I'll try really, really hard. I'm like, the gray belt? You want the gray belt? But don't you want to be proud of me? If you want to be proud of me, you wouldn't want me to get it. So what are you going to give me?

12:01

I like that.

12:13

So he's negotiating. I eventually convince him to do it for 20. He gets another 20 from his sister. And then after he gets to 20 he's like, you're not going to match her. I'm like, I already gave you money. He's like, you can match more.

12:14

I like that.

12:26

It's never ending. So then he's just like, he's like, daddy, I'm going to create a business so I can make more money faster because you don't give me enough.

12:27

I like that. I like that.

12:35

Whatever the motivation, do chores to make money. But the problem with the chores is he doesn't make enough money from the chores. He's like, this is too slow. I need a business.

12:37

I like that. I like that. So mark my words, I wouldn't be surprised in the next, you know, one or two years or so. But this actually brings me to my next point here. Task driven white collar work is going to zero. So when we say white collar work, we mean that you're sitting on a computer, right? I believe that we're going to be doing a lot less tasks. We kind of touched upon this a little earlier, but I have this example over here. This is typefully, right? This is the little Twitter app. And basically they have these AI agents that will write these tweets for your manager. Social. But earlier I gave you the kind of, you know, the programmatic SEO example, the copywriting example. And if it's already a 7 out of 10, it's just going to give a How to be rich.

12:45

That sounds like an Indian person.

13:20

Very rich.

13:21

Is it Indian version Sounds Indian version.

13:22

Ideas. Zero investment.

13:24

No risk.

13:29

No risk. No risk. No hard work.

13:29

No hard work.

13:31

Saturday Sunday off world tour. World tour included Shark Tank friendly ideas. Anyway, I didn't mean to go to that but this, what I was just showing on the screen was cloud code kind of working with typefully. But I do believe that strategic work. And guess what? Watch. Neil, imagine if I worked for your company and I hated the work that I was doing. So imagine I was a paid media manager right now I, I don't like managing paid ads, right? I'd rather just maybe I like planting flowers or something like that. Guess what? You can do that now, right? Long term because the. And you can become really good at. Maybe you know everything about gardens. Maybe you're the best strategic thinker when it comes to gardening, but you're just good. But you don't give a crap about the paid media work, right? So I think it's going to put most people in the right spot. But I think a lot of this stuff right now, like the way Jensen from Nvidia talked about it, it's like, you know, we don't want our engineers to be coding all the time. We want them to be thinking about higher leverage stuff. Same thing with our marketers. We don't want them to be pushing a bunch of buttons. Our purpose as our companies is to help our companies, our customers, make more money by getting more customers.

13:32

So back in the day, when you solely focus on marketing and I'll share my answer after yours. When you just mainly focus on marketing out of an eight hour day. I know you work more than eight hours and I do too. But let's just use simple math. Assume our workday was eight hours. How many hours did you actually spend on the computer doing marketing related stuff?

14:32

And like when we're like 25.

14:52

Sure.

14:54

Okay, so let me think about this. So when I was working at that, that education company that time I was working seven days a week, I was like a lot of my time, I.

14:54

Would say over 50%, 60%, 70% on the computer.

15:05

50, 60% of my time doing marketing. Yeah.

15:08

So I remember when I started when I was 16ish.

15:12

Yeah.

15:16

And back in the day, technology wasn't as great as it is today, which is obvious. I was probably spending like 85, 90% of my time doing the actual tasks and work on a computer. Fast forward in 20s, of course, scaling, hiring more people, I would say that it was probably somewhere around 50, 60%.

15:17

Yeah. So you're starting, you're saying in the beginning it was 85. Yeah, 85. Yeah.

15:34

Easily 85.

15:38

Because at 25 already had a team under me. Yeah.

15:39

So and then at that point, call it in my mid-20s, I would say at least 50, 60% of my time was on a computer doing just work. And now if I fast forward to today for at least my marketing related activities, I probably spend less than 10% of my time on the computer.

15:42

Yeah. And I'm thinking about it like, because I consider this a marketing activity. Right. Or doing.

15:58

And so it's recording content.

16:02

Yeah, this, yeah. So okay, if you think about it, creating partnerships.

16:03

But some of that, you know, even with partnerships you can have the AI help create lists. Like even though I told you I do a lot of the stuff manually when it comes to partnerships, I am having AI scrape who I'm connected with on places like LinkedIn that are large companies and where we have a lot of mutual friends. So I'm still having AI help me. It's just I am doing some stuff manual. But before I would have to do that and actually go through LinkedIn manually and do it all myself.

16:08

I, so let's say right now, give or take, we're working, you know, 60, 70 hours, sometimes. 80 or something like that. Would that be fair to say?

16:33

Uh, 60, 60 for me, yeah.

16:40

60, 70.

16:44

I don't know how many hours I work.

16:45

I mean, we're thinking about it all the time, but yeah, so I, I.

16:47

I don't work the same amount of hours I used to.

16:51

Yeah, I know.

16:53

I work way more than 40. Yeah, let's go with 60. Okay, so 60 work seven days a week.

16:54

So then, yeah, 12 hours a day, whatever. But anyway, it's hard to calculate this because we're thinking about work all the time, but so 10% would be six hours. Right. Which seems about right. So let's just say we're working 60, 70 hours. And I'm like thinking about it right now. I'm like, yeah, it's about the same. But the thing I think the takeaway from this too is as you continue to advance in your career too, if you're doing something that you love, you're going to be able to work on higher leverage things. And every day you should be thinking about what's the highest leverage thing I can do today. Just one thing today to get me closer to my goals. That's what we're getting at. Because eventually you're going to have a team around you and then you can focus on what? You can focus on doing deals, you can focus on hiring amazing people. It shouldn't be you thinking about doing all the time.

16:58

Yeah.

17:35

And that's what we're going into with all this stuff, because these things are going to do the work for you.

17:35

Dude, I just started doing it in my head. So I work if I exclude the time I'm spending with kids and family, I work roughly and I'm excluding the time I'm on a plane because I have nothing to do other than work. But on a normal day, I'm working nine to 10 hours Monday through Friday. That's after adding back kid time and family time. Right. And eating and all this stuff on the weekends. I probably work six hours on Saturday.

17:39

And six hours a lot for Saturday.

18:04

Five to six on Sunday.

18:06

Wow. I didn't, I thought you would work less with kids on the Saturday and Sunday. That's a lot.

18:07

Yeah. Because if I, if I keep myself busy, I had to do less stuff. I love my kids and I love my family, but I'm not the type of dad. I'll throw a ball with my son and play baseball like I did that this morning indoors, probably not the best idea. I don't care if he hits a wall.

18:13

Horrible idea.

18:30

But he's having fun. Yeah. Now, I can always repair the wall, but the memory I'm going to get doing that with my kid is worth more than the wall.

18:31

Somebody quote that. Somebody clip that.

18:39

Right. So, but on the. I'm not the guy who wants to be playing with my kids for eight hours a day. I just can't do that. Like on the weekend, I'll take them for bike rides and I'll chase them around on the bike or I'll go to their baseball games or whatever other sports they have or do swimming with them and jump in a pool. But I like working because it keeps me going and I'm so passionate about it. I can't give it up.

18:40

I don't think. I think three to six hours a week, a day on the weekends is great for the kids. I don't think they want all your time.

19:02

Like, oh no, they would take all my time.

19:08

Well, but like think about us growing up. I don't think we're spending all that time with our parents. Like, they've had boundaries.

19:10

No. Different life.

19:14

Yeah.

19:16

When we were growing up as kids, we would just go play in the front yard. Right. Or outside. And you would just come home without a clock when it's dinner time.

19:16

You agree with this?

19:23

Is that your life?

19:24

Mostly. Yeah.

19:25

Yeah. Same here. Kids do not do that in today's world. Go ask anyone who has kids. They don't let their kids just go play and then come back at nighttime.

19:25

Oh, you have rich kids?

19:31

No. Even non rich kids. Don't know. Doesn't happen. And then B, when kids go play with other kids, parents are usually there supervising. Yeah, we didn't do that stuff when we were young. You just, if you're five years old, just go out and play.

19:33

We did always have a parent there. But you did.

19:45

I did not.

19:47

Yeah, we did. Yeah. Maybe it's the Asian thing, but okay, check this out. So let me. This is the third piece to tie this in. Right. So we just talked about how revenue per employee is skyrocketing. We also talked about how task driven white collar workers going to zero. All right, bye. Take care.

19:48