#70: Mike Michalowicz, Author and Entrepreneur — The right way to hire; practical exercises for t...

Welcome back. This is From Startup to Grownup. My name is Alisa Cohn, and today I'm thrilled to have Mike Michalowicz on the podcast. Mike is a multiple-time entrepreneur, a 10-time author, including the very successful book Profit First, and a speaker. Mike has a new book out called All In: How Great Leaders Build Unstoppable Teams. Mike's mission is to eradicate entrepreneurial poverty, and we talk about what entrepreneurial poverty is and some of the root causes. We also talk about Mike's personal journey from making a ton of money to losing it all and going bankrupt, along with his realization that when he had all this money, he was a jerk. I wanna warn you that Mike uses some colorful language to describe what a jerk he was. So if you're sensitive, you can skip past the first 5 minutes. Beyond that, there is so much wisdom here. We cover Mike's work with small businesses and what their common challenges are. Turns out these challenges are relevant for you even if you're not a small business owner. We talk about what it takes to lead great teams, how you can better know your employees with some very practical tools, and why you should replace your interviews with camps just like sports teams do. This is a fantastic conversation and you're going to love it. So please enjoy my great conversation with Mike Michalowicz. This is your chance to be on stage right now. I'm scared.

I'm scared.

Here we go. Right here. I am here with the one and only Mike Mike Michalowicz. Mike, so much to talk about. Welcome to the show.

Alisa Cohn, thank you for having me.

I love your curtsy. Appreciate the special—

Yeah, you don't hear that often.

I know, really. Thanks for coming in. We have so much to talk about because, Mike, you're out. You've done it all. You've done all the things. You've done the businesses, you've sold the businesses, you've written the books, you've talked the talks, all the things. When you were a kid, what did you think you wanted to be?

Garbage man. And I still have an aspiration to do a day out on the truck. I think, I think those guys are, and I'm not trying to generalize, I'm sure there's women that do too. I've only seen men. These guys are burly. They're chomping on cigars at 5 in the morning. They're throwing stuff that weighs. I don't, I can't pick, I cannot pick up my garbage bag, let alone my garbage can. Right? So I'm, I struggle to get my bag and then these guys, they double hand flip They do a curtsy afterwards. My problem is the stink. It definitely smells bad.

Yeah, but at least you get to say you spent your time outside. By the way, let's not get— let's not go down the path of Burley, because as you know, I'm a fitness fanatic. So now I'm kind of like, oh, I wonder if I could lift all those cans.

Dude, we should— I have this as an open offer. If there is someone that owns a refuse or waste management company of some sort, I'm in for a day. As long as we can do it safely. I do want to hang off the back of a truck. I don't want to do it down the highway. But maybe me and you can do it.

I love it. I love it. We're already inventing things here on this podcast. And, but is that your final answer? What you want to be?

That's what I wanted to be when I grew up. I mean, not like my entire life. I was, I wasn't like in high school saying, oh, maybe, but I remember a period in my life. I just, I love these people. I'm like, my God, that's, that's awesome.

That's the life. Living the life.

Yeah.

Well, a lot of kids are into garbage trucks, but at some point you decided that, that you had a different mission. In your life. So I'm just curious about your current mission and how that evolved over time then, from the lofty goals that you had to now the sort of other elements you're doing.

It happened during a de-dicking process. So let me give you the before and after, or the after and before. So today my mission, I actually have on my wall right here, it says to eradicate entrepreneurial poverty. And what I mean by this is there is In the US, 33 million small businesses, $25 million in revenue or less, that qualifies as small. Internationally, I think it's 350 million small businesses. And the vast majority of these business owners are in starvation mode. Not necessarily literally, but perhaps some, but figuratively. They don't have enough money to pay the rent, pay employees if they have them, let alone pay themselves. So it's constant sacrifice. And it's irony, it's the greatest irony because we went into business to financial freedom, to have personal freedom, to serve a calling of sorts or a desire. And those are things that don't happen. Well, before the de-dicking process, I watched a movie called Wall Street and it had this Gordon Gekko character. Greed is good. Yeah, that came out. I think I was in college when that came out. I remember watching it and funny, about a month or two ago, I saw a picture of me in my first business, greased hair. I did everything to look like him. And I'm like, that's what I'm going to be. My passion, my interest is money, and I'm going to get rich. And it didn't happen, and I found it very unfulfilling. But what did happen, my first business was in the tech— actually, two businesses in a row in the tech space. They were not sustainably profitable. I was that person who was living entrepreneurial poverty. I sold both those businesses and had two exits. One was a private equity deal. The other was a Fortune 500. And I did become a millionaire in my early 30s, self-made. And then I was like, oh, I've arrived at level 1 now. Now I got to show off my effects. So I got the expensive cars. We were going to do this massive expansion for our house, but we decided to move into Mountain Lakes. Well, you're from Jersey. It's an expensive town. I'm like, that's better. That's more us. And we went on a big long sabbatical in Hawaii. There's a private island called Lanai. Larry Ellison owns. We're going to stay there. I just was a dick. And I remember you've met my wife, Krista. Yeah, we're out. And she's like, you know, I really do want to get a new car. I said, what car do you want? And she's like, oh, you know, some of my friends have the Land Rover like that. So we went to the Land Rover dealer and I was such a tool. I didn't realize it. The store manager comes over and says, what would you like? I'm like, whatever you got, it better be the most expensive. And the store manager's like, oh yes, sir. Yes. Goes running. And I'm like, But then my wife looked at me, she's like, what is your problem? And I'm like, I regret saying this. It's actually hard for me to say now. I looked at her, I said, we got more money than God. As I said those words, I felt— I believe in God and I felt the wind just go out of me. It was hard breathing in the moment. I was like, what just happened? And that's when I think it was divine intervention, the de-dicking. I was a dick up to that point. I don't think outwardly, like, I hope I didn't outwardly seem, but I was judgy. I thought that accumulation of stuff was success. I thought I was better than others. Totally dicky. And then I lost everything. So it took me 2 years. I spent money aimlessly. I started businesses that failed. And then my daughter, I wrote about this in one of my books, came up to me when she was 9 years old. I had told my family, I think we've declared bankruptcy, we're done. I was crying. My daughter volunteered her piggy bank to me and said, Daddy, I got us, or use my money. And that was the time I finally hit the rock bottom and the de-decking was done. And I decided I need to get out and start being of service, that I need to eradicate entrepreneurial poverty. And I've discovered, I mean, it's true for you too, Alisa, is that what we are compelled to teach, I believe, is what we are actually yearning to learn. We're yearning to know. So what we teach is actually what we're a student of, what we need to master for ourselves. And so I've devoted, I think, the rest of my life, I can't imagine otherwise, to eradicating entrepreneurial poverty because selfishly, I need it for me. So now I'm an author writing books that does that.

Yes. I mean, we want to get into especially your latest book, but I mean, that is such a compelling story. I mean, I just wanna say that I, I mean, I am curious about two parts of that story. Why did you spend money hand over fist just like that? It was like just arrogance, just like, you know, cuz I think, I think you also made some bad investments, right? I mean like, yeah, he was, you sort of just saw like, I'm a genius. Everything I touch turns to gold. Is that right?

That's right. That's right. So I was in my late twenties when I sold my, I was, yeah, my first business and my second business I sold when I was 31. I had it like, 2 years and it just took off, right place, right time. And the first business in my head, I'm like, oh, I had to cut my teeth. I didn't know what I was doing, but I sold it. My second business, I didn't realize how important timing was. So we were doing computer crime investigation and it really wasn't big then. This was early 2000. Well, the Enron trial broke. We legit got the Enron call for defense and they said, could you do the work? And we're like, yeah. And got all these cases. And so we're instantly on the map. I never really fis— I never fiscally managed that company well, never. But the cash flow was such, we were getting such big cases, so much opportunity pouring in. I'm like, meh, I'm a genius. So part of it perhaps was my age. I, I do see it when I talk with entrepreneurs that are younger, particularly males generally, when I try to pry, what's your interest? Often it's like, I'm, I'm passionate about getting rich. I want, you know, and they're compelled. They see the video of like influencer dude with the jet behind them and the Bentley car. And it's just like, oh my gosh. But you know, I had to appeal to that too. I thought that was success. Now I see success as contribution, as giving. So it took me a cataclysmic financial event. To figure this out.

Yeah. Like you really hit bottom. But when you hit bottom, I guess I was also trying to figure out, and I understand you had, had this, you know, that you believe in God, you had a faith moment in some ways, but also when you really hit that bottom and said, we're gonna declare bankruptcy, why didn't you do what a natural thing to do, which is I'm gonna make it all back again. Like how did you then recognize that there was a mission in it for other people as well as you? I really agree with you. We teach what we need to learn.

Yeah.

But I'm just curious if you had that insight in that moment or you just followed your instincts or what was that? Bring us back to that moment.

I remember the moment. So I'll give you the exact day. It was February 14th, 2008. So I sold my second company and then it was about 2 years later that I had evaporated everything. We celebrate Valentine's Day, kind of like Thanksgiving dinner at our house. And my 3 children were there and so forth. And that's when I make this announcement sobbing. My daughter gives me the piggy bank. It wasn't like I woke up the next morning and said, epiphany, I got to fix this. I went through depression for 2 years. I stopped talking with all my friends. I did not go to therapy, and I started to drink enough that I looked forward to because of the medicative kind of effect. There was a numbing, but it didn't fix anything. And I was continuing this process. And in the background, my wife didn't work. We agreed that she wouldn't, but she was now trying to look for jobs and stuff because we wanted her to be a stay-at-home mother. She started looking for jobs and I was trying to get little gigs here and there, anything. And then I asked this magic question myself. There's a question that we've all heard. If you had all the money in the world, what would you do? And it was so freeing is it's not, you don't need to generate money doing that vocation. I asked myself that question, but the counter question, which is if you had no money in this world, what would you do? And when the answer's in alignment, boom. I remember once, I don't know why, but I was like, I would love to be an author one day to write books. And if I had all the money in the world, that's what I'd do. And then the question hit me. I said, I have no money in this world. I'm done. What do I want my vocation to be to generate money? I said, author. I'm like, oh my God, this is it. I also remember my wife saying something which was like the biggest knife to the stomach. When she said to me, she said, but you need to get a real job. 'Cause I think, oh my God, especially when you're an author hearing you need to get a job alone is like, it's a slap across the face. But she's like, Mike, we need money desperately. Like we're in trouble. We couldn't afford our house anymore. We had neighbors in Mountain Lakes who volunteered their house for us. They were going on sabbatical and they gave us their house. We were talking about moving. I'm in my, now in my late 30s, talking about moving back in with my parents. It was desperate times. And looking back on that, it's funny when you do these exercises of documenting your life, looking back, you see this pit. It was the shittiest time. Today, I am more grateful for that moment than anything in my life. It became the great reset for me. And I have, I feel, I hope I do, a massive empathy for entrepreneurs who want to get rich, aren't getting there, and this desperation. I also had this empathy for people who think, well, I guess this is just what it's going to be. I'm going to work all the time relentlessly and I'm never going to get forward, but I've made my bed, I'm going to lay in it. I don't think either of those are necessary. And it was, as I shared earlier, there are great ironies. I'm out there trying to help others with this, which is actually helping me and, and is a great source of income, which is then sustainability to do more of it, to live a life of comfort. And that is an amazing, fun thing. I wish that for everybody. And it's, it's been an upward spiral.

Yeah. And it is a spiral. It feeds itself. That's just so, so perfect and so beautiful. And you know, it, I'm so struck by, you know, sort of entrepreneurs who do have this, you know, this sense of like, it has to be this way, it has to be that way. Or like success looks like this. And I'm just curious, you met so many entrepreneurs, like, How much of success do you think is the inner life? Like, what do you think that entrepreneurs have to change or identify in their inner lives to be successful?

Yeah, I think for me, and I've had the privilege of, of working with some entrepreneurs and, and helping identify this, is identifying either a traumatic moment from our past where we drew a line in the sand and said, I'm never, never allowing that to happen to me again or anyone else. And financial trauma is nothing compared to what other people have experienced. And some people become, I guess the word is the victim of that. They say, this has defined me. And other people say, this won't define me. So we have that choice. And the beautiful thing is you have that choice any day. You can say going back, and I did, I let it define me for 2 years. I'm a financial failure. I never deserve this. I suck. I let it define me for 2 years and then one morning, and maybe it was a cascade of effects, I said, this will not define me. I'm going to redefine it. So a traumatic event. And then I think the other trigger is ironically the childhood dream. Some of us miss out. Do I still want to be a garbage man? No, I do want to live out that fantasy for a day. It doesn't speak to me, but I do know some people who say, gosh, I am yearning to do this. And that inner child is being ignored. And, uh, what a horrible situation if that, that child gets ignored forever. So I, I would pick one of those two.

Yeah. I think that's so, so true. Have, do you have, like when, maybe talk a little bit more about the specific, the kinds of entrepreneurs that you work with and what you do with them. And then we definitely wanna talk about your, especially your latest book, All In, and talk about how people can engage their own teams. But first, talk about the kinds of entrepreneurs that you work with.

Yeah.

And how you work with them.

Yeah. So I'll give you kind of the layer structure. So I am an author now of 10 business books. Profit First is my most popular. And what I do is I look for a desired outcome that we have. I want to be profitable. The actual outcome. So desire versus actual. And if there's a discrepancy, I'll investigate, well, what's the method that we're told to follow? I find entrepreneurs are wickedly smart. But we follow some systems that have been kind of instilled in our mind. So the example of the Profit First is we're told that profit comes last. It's the bottom line year end, but it's also human nature. When something comes last, it gets ignored. So most people don't address profit. They don't bake it into every transaction. So I flip the model. Take your profit first, pay yourself first principles, your business, your business will grow. So what I do is I write a book, then I will find a licensee, someone that wants to buy the global rights to teaching or certifying others in this methodology. So I have 4 or 5 books now that have active licensees. They in turn teach the entrepreneurial community. So I come in at a very— I don't know if surface level is the right word, but I think it's the most accurate. I don't go in deep with people. That's not my talent. But I'll go in and say, here's some contrarian ideas, or here's an inspirational message, and you've got it. As a result, best estimate I know in book circulation, it's around 1.5 million books. In people speaking and so forth, maybe there's a little bit more of an additive, but the entrepreneurial community is consistently what I call micro-enterprise. These are companies, I would say 80% of my readership are under a million. I would say the other 20% are generally under $10 million. They're all founder-based and you mean no venture capital. The only money they raised was probably from their own pockets, maybe some, some family or something like that. So they're generally these— I mean, they're not sole proprietorships, but that's the model that became an LLC or an S corp or something. Generally, what we do then with these folks is we'll put them into one of these programs that can help them in the moment. And in the most kind of highest level is we'll actually invest in these businesses. Right now I'm invested in 11 companies. We're hoping to add 8 more this week. Actually, we reach out tomorrow to folks that want to join us. And so we take a phantom equity position for a period of time and help turn these businesses around. And generally consistently see there's like 5 or 6 common problems that a lot of businesses have regardless of the vertical. And now I'm in, we're in every vertical from appliance sales to diesel engine repair to a candy store in Montana, to professional services and so forth. And I go in, I try to turn this business around and knock on wood, My hopeful final thing, starting to come up with this phrase now that we've been told that most small businesses on the brink of failure. And I, my research indicates the opposite. If we're really on the brink of failure, all these businesses have been on the brink of failure for 5 or 10 years. They would've failed by now. We're actually on the brink of success. It's not like one bad move's gonna take us down. They've made those bad moves and survived. It's one good move will move them up. So I see the brink of success in these businesses and and try to help them out.

I love that. I love the type business model. I love it so much. I also love that you get to use your zone of genius, right? The idea of the writing the books and the speaking. Yeah. And the sort of darting in and saying inspirational Mike-isms, right? So that's kind of your special sauce. That's how it, that's how it flies. But I also love this idea of like on the brink of success. I mean, when you, and when you talk about the sort of 5 or 6 common problems, can you just start, just articulate a few so people can understand what those are?

Oh yeah, by all means. You know, one of the most common problems with small businesses is their margins. Usually it's emanating from pricing. They literally undervalue themselves and they got business in the very beginning because they were the cheap guy, because they had no clue what they're doing. And then they believe that being the cheap solution is the best and it's actually the worst thing you can do. So we gotta change the pricing model. You know, other things that affect margins are efficiencies in an organization. That can be a case. That's not typically one. But so the number one thing we look for is, are they mispricing? Most are. Secondly is they don't have a clear client. Like if I say, who's your number one customer? And they start off by saying everyone who, I'm like, oh my God, it needs to be so specific. One of my favorite stories came out of the Savannah Bananas. They use Profit First, they're a wildly successful baseball team. They had a game that they hosted 5,000 people showing up for a minor league Harlem Globetrotters-like baseball game. Someone left their sneakers by accident, apparently in the sand. And they said, we had a customer so into this that they walked outta the stadium without sneakers and didn't even notice. They took those shoes in their conference room. The head chair of the conference table is dedicated to the shoes and they just sit there and no one will ever sit in that chair. And every time they have a meeting, they say, are we serving them? Is someone a customer who's so engaged that when they leave, they forget their shoes. And they've further defined it's got to be a family. They said, we don't want people on their phones, we want family connection. And so they have it so clearly defined. When I called them and said, hey, I can bring down 50 business professionals, they said, not my— not our target, sorry. Maybe we can accommodate you, but this is our target. So number 2 is these businesses don't know their avatar. They say anybody. And if it's anybody, you water down your solution. Next is profit. It's so interesting. By implementing Profit First, it causes this cascade of looking back at all the problems. So once you say, "I'm going to take 20% profit," for example, "of my top line to assure that profit," it shows a cascade of problems. If you can't afford that, there's problems with your margins, there are problems with your efficiency, there's problems with your target client. Recruiting is another common one is I had a buddy or a friend or whatever, and people have outgrown The, the position's outgrown them or they can't grow it. Or the owner said, you know, I just have a relationship with them. They're not a fit, but I feel so bad terminating the person or releasing them to pursue better opportunities. And those are usually the categories. It's interesting, you fix, fix one or two of those things, these businesses start to turn every time.

So true. Yeah, those are true for the small businesses you work with. Also the venture-backed startups that I work with, same exact thing.

Same thing.

Fascinating. I mean, these are really business problems, right? Over and over and over again. And I love the idea of profit first, just to say that because The notion of pay yourself first in general, I think what it does is it, when it flips the script, it then requires you to do what's necessary to build that profit margin in, and then you think differently and then you take different action.

I, I, um, yes, I, I interviewed for one of my books a, a bodyguard for one of the big 5 publishing houses. Was it Macmillan or Penguin? I can't remember. Random House. But he had an interesting insight. He was at all the board meetings. He said, I just stand there. So I listen. And he goes, to your point, Alisa, he goes, the problems that these corporations have that are doing billions or hundreds of millions is the exact same problem small business is having. They just add more zeros. I gotta let go one person, my heart's torn out. They gotta let go of 1,000 people. It's the same thing. It's just an amplitude of zeros.

Totally. Wow.

Yeah.

Um, Mike, I wanted to— you've talked about hustle culture and what's wrong with it. What's wrong with hustle culture?

I hate it. I remember, personal story, I woke up one morning, I looked out, it was dark because it was like 5 in the morning. I was about to head to work. I was like, "Oh my God, this is day number 5. I haven't seen the sun." I was getting into work, grinding it out. By 6:00 AM before the sun would peak. This is in the winter. And I was leaving at 6:00, 7:00 at night, the sun was set. Literally 5 consecutive days without the sun. And I'm like, what am I doing? What's so interesting about this hustle culture, and there's still pretty big proponents, you got to grind and hustle it out. That's bullshit. Because what happens is we become a crutch for the business. The business has a dependency on that hustle. There's a, uh, right down the street from here, there's a, these power lines that go outside my building here and there's a tree that grew into the power line that they've cut in the bottom of below, but the tree stump is still hanging on the power line. I'm like, oh, that's what businesses do. The business, the, the owner sacrifices themselves time-wise, financially. They don't take any money cuz they're gonna carry the business forward, but the business becomes dependent on it. It kind of morphs around their power line, if you will. And now the business can't release. It actually cripples a business. So when I hear stories of Elon Musk, and I'm not— what a success. I'm not degrading what he's achieved by any stretch. But when we see these stories of he sleeps in his office, he works like an animal, all this stuff, it sets this precedent of saying, oh, my business can only be successful if I sacrifice myself. Instead of saying, how do I leverage what I know? How do I use other people? Much more thoughtful. I think the easy way out is just to work and grind it out as opposed to think it out. And guilty. That's what I did for so long, for so long. The discipline that got me out of this, I do it now, is I take off every Friday, the full day. I found that I didn't even have the discipline to schedule that way. My assistant books Fridays as not schedules and she blocks it for me. She's much more diligent in protecting my time than I am. Don't work on weekends. Um, you know, I, I have my exercise. I like you, my God, don't find like that. I text you once like, hey, can you talk real quick? Like, I'm working out, you son of a bitch. You know, but the same thing, I have literal truth.

This text I sent, yeah, it's true.

And like, it was emoticon of the finger. I didn't even know you could do that. I was like, geez, Alisa. Um, but by protecting these blocks, I, I've been able to change it. But here's the interesting thing, then it forces leverage. It's like, oh, How do I also get this down? Is it technology? Is it other people involved? You know, what is it?

Right. It forces it. I think that's the point. It's a forcing force. Forcing it. So powerful. Now, Mike, your latest book is All In. Yeah. Let's talk about it. Why'd you write the book?

So pre-COVID, I'm getting calls from entrepreneurs and some larger businesses saying, um, we're having a tough time recruiting. What was interesting is the big businesses said, how come small businesses can get some of these rockstar people and they don't have the resources we do? They can't give the benefits or the salaries. How come they're recruiting? I was like, that's a really interesting question. And, um, the reverse happened too, is, is these small businesses, what can we learn from the big guys? So I started the research, then COVID happens, and what was a desire pre-COVID became a demand post-COVID. So I want flexibility. I demand flexibility. I want remote work. I expect it. And so it put in hyper speed. So when COVID hit, I was like, oh, I gotta write this book. What's interesting is, uh, for my speaking work and my book circulation, speaking with a lot more big small businesses. I have a gig, um, Wednesday to a corporation with 900 employees. It's, it's a life sciences company. Talking about this engagement, and I, I think the essence of it is humanness is how you lead humans. Like it's, it's so obvious. But there's more to it. And, and what I did is I looked at every single element of, of the process of building teams, the recruiting phase, the retention of folks and, and raising the bar and found interestingly, like Profit First is often we're doing the exact opposite of what would recruit someone that's fantastic. We do the exact opposite. I'm saying that would retain someone. So what are these obvious but not well-executed things?

Yes. Oh my God. I can't wait to talk more about those specifically. I'm totally pumped. Oh, 'cause I'm totally into this myself. The idea of we, you know, we hire people based on, I don't even know what, to be honest with you, just the sort of the vibe or sometimes around, I like this person.

Yeah.

But certainly we use interviews to hire people. What is wrong with interviews?

So I interviewed for this book a woman named Jewel Kucera. She is from the University of Chicago's medical department back in the day. And they had this great hiring practice, which I'll share. But the first question out of my mouth to her, I said, "Well, what do you think about interviewing?" And she said, "Mike, interviews are good for one thing. If you are looking to hire someone who's going to be a professional interviewer, that's how you should qualify them." But otherwise, yours is a waste.

I love it. It's so true.

Because yeah, it's like, how much do you like this person? And she went on to share this concept of skills assessment demonstrations. But I went deeper and there's another form that no one or very few are doing that is so strong indicating someone's potential, um, that I encourage all businesses to do it. So this might be a cliffhanger. I can share what it is, but yeah, we wanna hear what it is.

All right.

Strap on your seatbelt.

Right after the break. No, just kidding. This, this is no break.

Yeah, a little bit of a cold. That's fine.

No, that's okay.

Yeah, I'm not smoking, I swear. Um, all right, get ready for this. So skill assessments, I think many of us know, few of us execute. I'm looking to hire someone, they know they're being interviewed, we try them out on the thing and it's a good indicator. But there's a thing called potential assessments and there is a half trillion, as in T, industry that does this, and it's the sports industry. They do a thing called camps. And what a camp is, is say the football— there's the sports football, and the athletes all come together for a camp. The goal of the camp is to educate everyone and improve them, but the coaches are also watching the ability of people and seeing who has the most potential. Now here's what's interesting about potential. We all want people with the most potential. It always reveals itself in the same 3 stages. First, curiosity. The people show up and are interested. Then desire. I want to keep doing more of this. I'll show up early, have lots of questions. Then thirst. I can't quit it. So you would look for people that are going from curiosity to desire and thirst, and that's usually your best talent pool. Well, there's a, there's a mega company that does this and no one knows. Home Depot has a Build a Birdhouse workshop. Now here's what's beautiful about it. They don't say we're looking to hire people. They don't. They simply say, learn how to build a birdhouse. You're gonna have a good experience with the store. Maybe you'll, you'll, you know, fall in love with them and keep buying product there. They have one employee there observing participation, looking for curiosity, desire, and thirst. And the parent who's helping other parents or asking questions, they'll tap on the shoulder and say, hey, you're considering working at Home Depot. You're the type of candidate we're looking for. So it's a vetting process without anyone knowing they're being vetted. Just like a football camp is a vetting process. While no one knows they're being vetted. The beautiful thing is everyone gets better at the process. Everyone plays the sport better. Everyone builds a birdhouse. So one last example is as I was writing this book, I was coaching some businesses on this. I was talking with this bookkeeping firm, small firm, 5 employees, and they said, we are struggling to get people. We can't compete financially with the big accounting firms. No, quote unquote, no one wants to do it. We run an ad on, you know, Indeed or wherever. The platform du jour is, and we can't find anybody. So I said, let's run a workshop. She set up— her name was Tuesday P. Brooks.

Well, it still is. Her name was Tuesday.

Tuesday P as in Paul, but wasn't Paul. I don't remember her middle name. Brooks is her last name. Tuesday.

Tuesday P. Brooks. Brooks. Yeah. Tuesday. Everyone should have a name like that.

I love— and she's the nicest person. Tuesday is originally from Africa. She's based here in the New York area. And she reached out to a school, I wanna say in Uganda or Kenya, and said, hey, um, I understand you don't have a bookkeeping course. I will provide the materials and teach course. I wanna work with an adjunct professor. They had 12 women who joined this course. At the end of the 12 or 15 weeks, they all walked out with a certificate of accomplishment as a bookkeeper. And she, during the process, cherry-picked 3 employees. They are her best employees. Driven, educated in the way she wants them educated. She trained them. And the best part is every other person that went through the program is gainfully employed in accounting.

Oh my God, I love that.

So the lesson here is anyone listening in, if, if you want to recruit great talent, recruit great potential, you do it by putting on workshops. So educational events. If you, if you wanna hire someone that's, uh, a CFO, put on a workshop for the advanced skills a CFO needs. You can have a prerequisite saying you must have 5 years and so forth, just like a, college class, but here's this specific tool. There's this concept of A-players. I don't like the title because I think everyone is an A-player. Everyone has A-potential. You match the right person with the right role, everyone's going to be a rockstar. So I don't like that titling, but I do know there's a pattern. People who have a passion for something will want to learn about it. So if you put on educational events, you inherently are attracting the passionate people. Not people that are looking for jobs necessarily, the passionate people. Then you get to observe them. As you educate them and then you can reach out and say, hey, we'd like to hire you. It's a, it's a powerful recruiting tool.

It is very powerful. It's a recruiting tool, but it also builds your whole brand. Like your point about Home Depot is that they then get connected to the store and they had a good experience there, even if nothing else happens. So it builds your brand no matter what. And then it kind of causes all these cascading effects. But how would, like, let's, let's, let's brainstorm now for like of a different, other companies that would do that. Like for example, um, any normal, any regular tech company venture.

Yeah. Well, okay.

I'll give you Audible who did this, but we can go other technologies. Okay.

Audible needed people.

Yeah.

So Audible ran a concept called returnships, not internships, but returnships. The qualifier, they said, if you've been outta the workforce because of an illness or caring for someone with an illness for over, I think it was 2 years or 5 years, you can come here for a returnship experience where we're gonna educate you on the newest technology, the newest tech stuff. So these are past professionals reintegrated with the workforce and they said after the 5 weeks you can go seek a job. They hired— there was a New York Times article about this. Over 50% of the people who went through the returnship program are now full-time Audible employees. So you can do it in any space. A lot of people hear this concept, they say, oh, it's only for entry level. Like I can, you know, I need to hire dog walkers. Let me put on a how to walk a dog in groups course. Yeah, but this is for advanced people with the prerequisites. So I need a doctor and she's going to perform heart surgery. What you do is you teach the most advanced future learning that this A-player would likely want. So some kind of microscopic procedure. Then you say the prerequisites, the requirements are you must already be a doctor, you must already have these qualifications. So you're getting the people that you want and you know they're learners into the next level. Now the other thing is you may not have the skill. Like, "Ah, I'm not a doctor." Well, you hire someone to teach it. So you can always fill that. But the best people always want further education on what they're best at. That's the lesson.

So good. So good. And I love, I love how you have an answer for all these, like, do you could do this, you could do this, you could do this. The point in everybody is there's probably a way that you're not thinking about this. Yeah. How to create a workshop, a camp, something like that, that helps you really understand the potential that people have. And I would also just say it's like an interesting and new way to re— to recruit people.

Totally. And my dude, may I call you dude? I like to call people my dude. I got something even better. So as we're going through this process, coaching businesses on this, they're like, oh, it's too intimidating. I, I don't, you know, can I do it on Zoom? Yes. You know, but I don't even want an, I don't even have an hour to do it. We said, okay, here's the ultimate poor man's lobster. What I want you to do is identify a class that's going on for the type of people you wanna recruit. So let's say I need to hire an HVAC technician. Look through the adult education classes and find the HVAC class. Go as a student, not to be a student, to observe the other students. It's already in place and you get to cherry-pick people.

I love it. So many good ideas. These are great ideas. Um, and then you have the problem retaining people, you know. Have you heard of quiet quitting?

Oh my God.

Right?

Yeah.

Yeah. So, so talk about retention and then I, I wanna get separately to your concept of the A-player because I wanna just tease that a little bit more, but like, Talk about retention.

So this was like a big aha for me. My second company was in computer crime investigation. I'm in there, it's year 2. We are in the right place at the right time. Lucky, exploding. I run the numbers and I'm like, we can hit $10 million in revenue. Up to that point, I never had a business that size and we were going to bootstrap our way there and we're going to take down our biggest competitor in the process. I'm like, oh my God, this is it. After 8 hours of calculations, I come out. Call my team together, end the day. I roll on the board, it's a big whiteboard. We had like a huddle room. I put a sticky note over it. I put $10 million in bubble letters. I had Patty, she was my assistant at the time. I said, hey, we gotta have some like hyper hype-up music. Put on Eye of the Tiger. 'Cause it's the, it's the best. Like who doesn't get jacked up to Eye of the Tiger?

Eye of the Tiger playing. Yeah.

You hear in the background and, and she's rolling her eyes already, but I'm in it. I do this grand speech, "We're going to take down blah, blah, blah." And with great flair, rip off the thing. I say, "Here's our corporate vision. We're taking down Qualys, our competitor, and we're going to achieve $10 million in revenue this year." And there was silence. And I'm like, "What?" And so I did the cheesiest move of all, which is the guru hand prayer, bowing head, bouncing around. I go, $10 million in revenue, right? And, uh, more silence and people shuffled away. And Patty comes over to me. She said something that changed my perspective of leadership. She goes, Mike, if we achieve $10 million in revenue, you get the bigger house, you get the new car. Why should we care? Here's the lesson really succinctly. Most leaders set corporate visions. Great leaders set collective visions. What's a collective vision? How do you continue on to say, I don't know if you know this, but so-and-so wants to buy their first house and their one child is undergoing a treatment right now and they're kind of struggling with it. The job of a great leader is to know what everyone's looking to achieve within your organization. And this shocker of shocks, no one's looking to achieve a $10 million company except for the owner. That's my dream. That means something to my fat ego, but to Amy here, she wants to overcome cancer for the 7th year clean, you know, cancer free. Uh, Aaron wants to buy a new house because it floods all the time. Uh, Kelsey wants to learn Spanish. Someone's learning to play guitar. Uh, one person wants to be a clinical psychologist one day. Like, everyone has their own dream. What's so interesting is we don't become a Make-A-Wish Foundation. My job is not to do these things, but it's to make that wish important. To keep it relevant, to say, how are you doing on that? Can I block and tackle for you? Can I make some introductions? Because when I'm an enthusiast for their vision, they become an enthusiast for my vision. So great leaders identify the collective vision of their organization.

I think that is so powerful. How do they do that?

So what we do is every single one of us write down our dream list. I actually have it. Turn my camera. Um, If you can see right there, that's my dream list for 2024.

Love it.

And so everyone has their visions and we all write it down for the, the year and decades ahead. Then what we do is every month we sit down and say, what have you accomplished on your dream? In between that, every week we are meeting with every employee for 15 minutes and just checking in, but also asking about their, their vision for themselves. It, it becomes This very kind of natural way of talking about work, but supporting the person in the role. Well, when you achieve a vision you have, you put on a leaf and you slap it up on the wall. This tree out here, it's blanketed with leaves. I mean blanketed. There's so many. I've never seen a tree bloom like this. So there's things from spending a weekend with my aging mom to had a surprise visit with my son in college and he was stoned. Funny things too. I went to Amy, she's our office manager, and I said, "Hey Amy, I think it's time we take down these leaves. There's no more room." And she goes, "We are not taking down those leaves." I get a little emotional about it because these are things that are so significant to all of us. Mine are significant to me and Amy's are to her. She goes, "No." She goes, "I got an idea though." She goes, "We can start getting paper flowers and we'll start pasting flowers along the bottom." And then we'll get birds in the sky and clouds. But she's like, "This is never coming down." I think the manifestation here, I can't speak for my colleagues, but just in my observation, I think they've never been supported in this way in business or in their lives for some of us, that their vision for themselves is so significant and important. Here's the greatest aha. It didn't happen. Here yet, but it's happened with other businesses that we've coached. Some people say, one day I want to own a business. I want to become— and when done right, there's an openness. It's not like you better not say anything because you're getting in trouble, right? That dream has to become a reality. So what these companies have done, and we've coached them on this, is why don't you set a plan? Say you want to start your own business. We're starting your own business in 5 years. We're going to see you through this. You're going to learn the process, but I'm going to teach you how to run the business. And I would be honored to be your first investor. I will own 10% of your business. I will send you clients, uh, over so you can, you can hit the ground running and you don't have to scrap from the beginning. So these businesses, by supporting other people's dreams, are expanding their own business. It becomes very beneficial to everyone.

I love it. I, it's so, it's so beautiful and also it's so human and so humane. Yeah. But it's not just like you said, Make-A-Wish Foundation. So can you, like, if, if someone's listening right now and they're like, okay, this is all happy talk. We're not here to like help, help people kind of, we're not help people to hear to We're here to help people create their dreams. We're here to run a business.

Yeah.

How do you really solidify for people the business impact of doing this touchy-feely stuff?

One of my favorite stories is Jancoa. So Jancoa is a janitorial firm in, I think it's the Chicago area. I interviewed Mary Miller, the co-founder. I said, I said, tell me about the company. She goes, I'll tell you this, Mike. She goes, no one's ever had the dream of being a janitor one day. She goes, but everyone has a dream. So they started a program called Dream Manager. There's an excellent book by Matthew Kelly called Dream Manager. It's a must read on this space. And she goes, but so they do this similar program of align, vision alignment, collective visioning and so forth. The turnover has dropped serpenti— serpentially. I mean, uh, extraordinarily exponentially. That's the word I'm looking for. Exponentially. You know, in, in the janitorial space, holding someone for 6 months to a year is an extraordinary And they have people for 2 or 3 years on average, and they have people there that have been generational. I interviewed one janitor whose son worked there and now his grandson works there because they love the company so much. The same janitor bought his first house because the company made it. He said, this is my mission. Now here's what's also interesting that Mary Miller told me. She goes, if you grant someone's wish, it's a form of entitlement. It's a gift. It's like, Here you go. And there's excitement in the moment, but there's no sense of accomplishment. When we achieve it ourselves, there's a pride, there's a power that we have seen ourselves. We can accomplish so much more when we do it. When he bought this house, he's like, what else am I possible? What else can I achieve? My favorite story came out of there that triggered retention with other people was one guy. He didn't know how to read or write. He said, I have a granddaughter. I want to read her bedtime stories. So he said, I'm going to— I want to go to school. Well, another employee is for reading and writing. Another employee raises their hand. He goes, I have to hop on the bus, be at the school at 4 o'clock. That's when classes start. I'm working. So I got to move to a morning shift and no one is available. One guy said, dude, I'm in. He goes, as long as it takes. So now there's a, there's a team working on one vision. They switched roles. This guy, 6 months later, is reading a bedtime story to his granddaughter and the place loses their mind and the retention goes up. So it drives retention. It drives better work performance, it drives flexibility, it drives camaraderie. There's just so many benefits on a tactical level for a business.

It's so great. Are there any special skills that managers, that founders, CEOs need to have to bring this into their workplace?

Yeah, you gotta be human. You know, don't, don't— you gotta be D-Dick, I think. Yeah. I, I, I'm not necessarily good at it because my, uh, I, I have a— actually been diagnosed with what's called hypomania. There's hypermania and hypo, which is one degree down, which is this kind of this energy which emulates perhaps attention deficit. So it's hard, harder for me to stay engaged for a long period of time. Definitely not impossible, but it's harder. I have another person, actually the president of our company, her name is Kelsey, who is the most engaged person. She remembers every single detail. She loves on you. When she became our collective visionary, if you will, there was a shift in the company. Before, I think the people would've done anything for the business when I was leading our program. They will take a bullet for Kelsey. They will die for her. They defend her. You side-eye Kelsey and you got 600 people attacking you because she cares so much in Kelsey's own way, in her human way about everyone's accomplishments. And the organization's performance, this is subjective, but it feels like it's even better. And the best part is it's not like now I'm like the side guy and Mike was kind of not that good at it. No, he's part of the team. I, I go meet with Kelsey, she does the reviews with me. Um, same thing. Um, I haven't excluded myself. I, I think actually great leaders do that. They, we identify what are we good at. I'm okay. Public speaking and writing. That, that's, I should stay in my lane.

Yeah.

And we find out people that are extraordinary what they do and, and we elevate them. And, and I think it takes courage because it, it's a realization, oh, I'm not that good at that, or I really sucked at it, or I was damaging the business by doing that. So that was my lesson.

That is, I think it's, yeah, very impactful. And also for all of us to do that self-reflection and to realize what we're good at, what we're not good at. And then to your point, you said that everyone had to have an, everyone's an A-player mentality. And you could say, you could, you could say, hey, everyone's an A-player if they're in the right space. Yeah. So again, while we're on the happy talk, Tell us about that and how that then drives actual business results.

Have, have you ever been to The Container Store?

Yes.

I love that place. Love the place. Right. But here's the, here's the absurdity. They sell freaking containers.

Yeah.

That's it. You can go to Walmart to get containers, but the experience at Walmart is radically different. Container Store, they're loving on you. They're educated. It's a small staff, but they care for you. They know the product inside and out. Walmart, you know, good luck finding an associate that even knows where the aisle is that has a box or two. So the question— and I met Kip Tyndall a few decades ago, he's the co-founder. I said, how do you do it? And he famously— and he's got videos about this— he shared this concept of one A-player performs at the level of three B-players. So if you hire someone for $20 an hour, an A-player, you know, back in the day, maybe that was what you paid, and you hire B-players for $15 an hour. You're actually hiring 3 of those people to perform at the level of 1. So it's actually more expensive. You're paying whatever, $35 or $45 an hour versus $20. So it's a good perspective. Then he shared, he did his presentation and I ended up sitting next to him for lunch. He goes, "By the way, everyone's an A player," which was kind of shocking after he shows this math. I go, "What are you talking about?" He goes, "We don't hire retail associates. We hire people's aspirations." So someone is in the theater community, we say, hey, this is an opportunity for you to express characters, to explore that. Would you want to do it? We hire someone from the retired community and say, hey, do you want to have some more social time and network with people more? This could be the outlet. You see, great leaders align the vision or purpose people have with the vehicle, the job to satisfy that purpose. And when we are serving a purpose, within our role, that purpose becomes of great significance to us. A-players— this is how I define it— A-players see the job as them. I mean, it's their identity. As the job goes, so do I. So if I'm poorly performing, I am a poor performer. A B-player sees the job as a source of income. And then the C-player, that's the worst of all, sees the job as an evil necessity. And by default, you're evil. So we want Someone that sees the job as part of their identity, and you can do it by asking about their hopes, their dreams, their desires, their interests, and morphing the role to satisfy that. Now, here's the other ironic thing. You could be a garbage man who's aspiring to be a thespian, or you could be a doctor who is trying to get more social time. The vehicle, the job, isn't as consequential as knowing what the purpose is. 'Cause I think any job can fill it. You gotta know the, you gotta have the skills and so forth. And we talk about how to do that, do workshops and camps and so forth, but align purpose within their role and watch people go all A over you.

Does that sound right?

You know what I'm saying? Oh yeah.

I said, yeah, I love that. And it's, once again, it's I think just being mindful of who you are as a leader and being mindful of who the people are around you. Like, hey, there are human beings out there Go figure out what their skills are and put them in the right spot to be successful. But again, it also starts, as you said before, with hiring the right people with the right kinds of attitudes.

You know, I don't know, I'm trying to jump it around. It does. It reminds me, you know, when I speak with, meet with entrepreneurs, I will often start off in a presentation with this line 'cause I wanna give 'em a shock. I say, do you know the number one job of an entrepreneur? No. What is it? The number one job of an entrepreneur is to be a creator of jobs. Not to do a job, it's to create jobs. And they're like, well, what do you mean? Well, data shows that I think it's 17% of the population ever starts a business, ever. 17% in their lifetime. Only 20% do it sustainably, successfully, profitably. So 20% times 17%, roughly 3%. 3% of the population ever runs an effective business. That means 97% of the population is looking for good jobs with good companies that are run effectively. Our job is to keep creating that. You know, we're the weirdos. We're the weirdos who chose to do this. But it's a shame that many entrepreneurs take the job and they do the work and they grind and hustle. They're blocking out people from doing the work and they're preventing themselves from doing the most important thing.

So true.

I felt compelled to say that.

I appreciate you saying that.

That's so true. Yeah, I'm on my soapbox now.

I love that.

No more curtsies for you.

No, thanks.

I want one more, one more curtsy.

You're like all preach all the time over there.

Mm-hmm.

There's just one more topic I wanna explore, you know, on this topic of, of, of employees. I wanna talk a little bit more about you and your journey, but specifically ownership. Yeah. So all of the founders I work with, all of them have this value of employees, you know, act as owners. Yeah. How do you really help employees act like owners?

So here, I'll tell you the shocking way that rarely works is actual ownership. ESOPs, stuff like that. My research shows it's rarely executed properly. It actually forms entitlement. So now it's funny, you give me a little piece of the business expecting me to perform more. I'm like, hey, where's my money? I'm an investor. There is another form of ownership that is the game changer. It's called psychological ownership. There's research back from the '80s. It kind of got buried by a guy named John Pearce. He's investigating human behavior and he found is we have a sense of ownership in something. When 3 elements happen. One is we have detailed knowledge of the thing. Secondly, we have control, authority over it. Lastly, we can personalize it. So the best example is like a car, and we'll talk about rental car first because that's something you don't have psychological ownership or legal ownership over. A rental car, you are told when you pick it up or return it, it better be a full tank of gas, no scratches or dents, clean interior. And I have a saying, when we're forced to comply, we seek to defy. It's human nature then to find ways to elbow back at the man. So I do donuts in the parking lot. I don't take it to the car wash, but when I own a car, so I own a little pickup truck. What I do is, um, I do get tickets for car washes. When I first bought the car, I, uh, spent an hour sitting in the car in the freezing cold winter, going through the manual page by page, pushing every little doohickey, intimate knowledge. I decide when I'm going to drive it, where I'm going to drive it, full tank, empty tank, I don't care. It's my authority. And lastly, I personalize. I can put little bumper stickers on it or something on the rear windshield mirror. I can program the radio stations. The more of those elements you give to someone, the more they sense they own it. Now, here's the greatest irony. I don't legally own my pickup truck. The bank does. I'm making payments, but I even say I own it when I don't own it. So with our employees, what we have to do within their jobs is allow them to have control. Ask them, what's the outcome you wanna achieve in this job? How do you wanna get there? How can you improve on our best practices? Control. Next one, intimate knowledge. Give them training. Let them learn more about it. Understand the details, the nuances. Afford them the education. The last thing is personalization. Is there things they can do to make it their own? We had, uh, uh, a landscaping company. Where the guys put on the side of their trucks that they put their name, that this is my truck. The trucks are meticulous now. Before that, they were driving heaps, but now they sign their names to, they personalize it. They feel like they own these trucks. They take care of it. Now I do want to give one caveat. Fiefdoms can happen, like where people start to protect their property and it's mine, keep people out. So you want to have what's called collective psychological ownership. Where multiple people sense they own things. So don't have one person's name on the truck, have 3 or 4. Don't have one person handling your accounting, which would be a bad move anyway. Have a couple people involved. And how we do it here is every employee gets a 4-week vacation. This is a protocol we started up, um, about 5 years ago. It is mandated you leave the business for 4 consecutive weeks in addition to a regular vacation. It's paid. It's, it's amazing. It's a sabbatical, but it's really amazing to the company because when someone leaves for that long of a cycle, the only way you can ensure the continuity of that job— for most businesses in a monthly cycle, something has to happen— you have to have redundancy. So every role has redundancy. Everyone can cover for everybody. And this way, if someone gets sick or decides to leave or something goes down, we have a backup in that role.

What a, what a brilliant strategy, because actually you make it to be a benefit for people.

Oh yeah, and they, they love it. I, I love it. Um, and it makes a healthier company. Yeah, it's kind of like a weight room. Like when you go exercise, um, you need resistance to build strength.

Totally true.

We intentionally put our, our business in a moment of lack or a situation at different times of the year. It's not like everyone's gonna— we're gonna take off this month. That doesn't work because now you actually time the business to handle that. It's all sporadic. So we're constantly taking an inoculation on, on what it's like to lose someone and then builds a healthier, stronger business.

Yeah. I love that idea. I love the idea. And I also just love all the innovation that you bring to this and that you think about. And it's like everybody right now could actually look at their workplace practices right now and think differently because there's a whole bunch of like stuff we do what we always do. Totally. And actually every single person listening right now could decide, I'm gonna just look at some of the processes we have around people and see if there are any that just don't make sense or that I could reinvent that would make them better. Yeah.

And I'll tell you what it's not. It's not the foosball table or we do the laundry for you. Those can be nice perks, but until you start showing a genuine interest in this human being, that's the foundation.

Totally.

You'll see all this intimate knowledge, personalization. It, it, it's the interest in advancing that person. Um, yeah. You know, their goals and their, their, their personal visions. It's the interest of them achieving their outcomes. It's that humanness.

Humanness. I love it. So Mike, back to you. You had this, this crash moment, this bottom out moment where your daughter handed you her piggy bank. And bad things happened, and then you spent your time clawing back from that. And since then you're a successful author, 10 books. Yeah. Business owner. But there are ups and downs in the journey from that moment on. What sort of ups and downs or maybe downs have you experienced? We wanna humanize you. You're not like perfect enough into the— Oh no, I am. Yes.

I, Mr. Perfect here.

Um, all right. What are you talking about?

No, far from it. Yeah. So I, you know, I did work as an angel investor. That was part of my major collapse. I had no idea what I was doing. I got outside of my lane. I'm like, oh, you know, I'm here, I'll invest in these businesses. You know, one of the interesting challenges I'm facing now is I don't want to manage a large business. Like, I'll give you Amazon as an example. I know some people are like, I want to have the next Amazon. I do not want the next Amazon. I admire that definition of success, but that's not my definition of success. So I don't want to have this mega business, but I do want to stretch my impact. So one thing I've done is I set up licensees and so forth, and it's much harder to navigate that, to care for each person. These are all these little businesses now that are linked in to make sure that everyone's being cared for equitably. And I understand from everyone's perspective, if, if I'm over here helping this person, why am I not here helping that person? So these, these pulls back and forth. Another thing is, is, is, uh, you know, we've been knock on wood, crushing it with cash flow because I implemented Profit First from day one.

For—

I think I've had 62 consecutive quarters of profit distributions. This goes back over 15 years ago. Amazing, amazing, amazing. Um, but in one of our businesses, I see the cash flow slowing. Now, the beautiful thing is there's profit distributions coming out, and it will continue for the foreseeable future. But what I'm so happy about is I see the problem now as opposed to traditional me where I've been 2 years from now when the bank hits zero and I'm like, oh, I thought we'd get that one big client and turn this around. I'm in, you know, I don't know how the DEF CONs work. DEF CON 1's the most extreme or 5, but I'm DEF CON 3. Yes.

Okay. Either way.

5 the most extreme?

Yeah.

Okay. So, you know, I, I was cruising along DEF CON 1 and now I'm seeing DEF CON 3 knowing DEF CON 5, if things stay as they are, is a year or 2 out. And that's going to be a calamity. So I'm addressing that now. It's really empowering to be proactively addressing these problems before they become real problems. So that's where I am now. Truly not perfect. And I start business ventures that have— I continue to start ideas that don't work out and fall by the wayside. I do like doing all these little micro tests, testing things out.

Yeah. How do you feel about that? Because a lot of people have trouble and they inhibit themselves from doing micro tests or trying something because it might fail.

Yeah. So what I do is I say I'm a quick start and I have a core competency, write, speak, core competency, quick start. I can get an idea going and I'll be enthusiastic for a day and then we're fading. So the first question I have is, is there someone else that wants to carry this? Then I say, can I carry my influence of what I've done to bring immediate momentum to this? You know, and this is something that can sustain by me simply doing speaking and writing. And so we started a small authors division. We now have, I think we're signing our 8th author this week or next because I'm out there constantly talking to my publisher about writing books and all this stuff. I said, hey, let's just record on a podcast with my co-writer. She's amazing. Her name's AJ. And we started recording it and sure enough, people are attracted to it and we're getting authors and we have a person that's running that division. It's small, you know, it's a low 6 figures. But it's profitable and it's like, okay, let's see where this goes. This investment group we started in earnest 8 months ago, maybe 12 months ago, got 11 businesses in. We've turned 4 profitable. There's a guy, his name is Greg. He's running, he's our portfolio manager, not my talent, but this guy loves it. It's so his talent, but I can leverage what I do, speak, write, get some momentum. I have a, a subscriber list of people that perhaps want a service like this. To have a partner in what I do. And those people come on board. So that's how I do it. But I've tried other things that just go by the wayside.

Yeah. And you don't seem to care.

No, you know, no, no. But I don't know if that's a discipline over time or whatever. I mean, maybe my ego gets hurt, but I remember Thomas Edison, who lives in your town.

Exactly.

Lived in your town.

He's a homeboy. Yeah, he's a homeboy. Yeah.

Your homeboy. Famously said, and I'm paraphrasing, I love failure because I'm one step closer to success. And so he, he thirsted for, I'm reading his biography right now and that's the guy just loved messing things up. He's like, I'm closer.

I'm closer. Yeah. It's so inspiring. And I think we should all be thinking about that, you know, the failure as sort of data. You're either, I said in my TEDx talk, you're either winning or learning.

Do you ever hear the, yeah, I like that. You ever hear the Sarah Blakely story about what her dad said to her?

No, tell us.

She said in an interview that every time she and her brother, I think she had a brother, would come home for dinner, the father would say, "How did you fail today?" And that was the one question I got asked every single dinner. What a great freaking question.

So great.

Because it's the reverse. I'm the parent who's like, "Well, how'd you do?

What?

You got 3 A's and a C? What's up with the C?" I'm harping on the failure, meaning I want to avoid failure, which means it's in my best interest to not attempt. I'm harming, in this case, my kids. And I heard it, I was like, "Oh my God, I am such an idiot. That's exactly it. You failed there. How do you improve upon that? What did you learn from it? How's this your greatest opportunity? Congratulations on the wins. Tell me about that failure because that's amazing." It also just desensitizes you. Yeah, it desensitizes you. My son's graduating. I'm sitting on my soapbox. I like, I like hearing my own voice.

I can't believe it. I didn't expect that.

Yeah, I didn't expect that. Yeah. So between me and you, José Tejas was like a 3-hour dinner. I just spoke for 2 hours and 59 minutes. There's 1 minute of everyone else talking. So, um, my son's coming back from college, my youngest. He's graduating and he doesn't have a job. And prior me was like, you need a job and so forth. And so what we agreed to is he's coming home to do experiments. There's some things that he's interested in experimenting with. And, uh, there's a few things I want to pursue in a business opportunity. He's like, yeah, I think your job is going to be starting these experiments and then keep looking for a job and pursue what you want. But do you agree to try things out? And this is my attempt to kind of learn from Sara Blakely and start failing. Just so you can learn.

I love that. Start failing. Well, just so you can learn, but also again to desensitize failure.

I love that desensitization. Yeah.

Yeah. So that when you screw up, you're like, oh, oh well.

And then we're all gonna, we all fail and we, you know, all the time when you're in, when you're in the like riding high, gosh, try to slow down that engine and kind of coast for a little bit. But it's inevitable. Like life's journey is up and down. I, I look at back and plot my entire life doing this map. I call it the life pulse cuz it looks like a pulse. Up, down, up, down, and you don't know where it's coming from. It could be 5 minutes from now and I'm blindsided by the next thing, but it's inevitable. So what I'm trying to do is when, you know, when you're in hell, keep going, or when you're going through hell, keep going. And when you're in the high, slow down, slow down as long as you can and hold on to that.

I love it. So true. Now, Mike, just a few more questions. Have you ever experienced imposter syndrome or severe self-doubt?

Yeah, yeah.

Tell us about that.

Yeah, I remember the first sales call because it was so blatant. I was working for this computer company. It was the first job I had. They sent me on a sales call by myself. I pulled up. I remember this vividly, and I was walking into the parking lot for this small office, but it was like one of these multiple offices in the building, and someone had a Dodge Viper. This was the popular car in the early '90s, and I saw it in the parking lot. And I remember looking at that and someone walked by me. He's like, "Oh, you like that car?" I said, "Yeah, I'm going to own that one day." And he goes, "Good luck." I was like, "Okay, all right." Then I walked in. So I'm like, "Ah, yeah." Then my ego's like, "No, man, I got to sell." I went in and I do a little pitch. Like we do these computer systems, so forth. And they asked the first question. I had no idea what the answer was. My face just went sheet red and then white. I started getting dizzy and I just stammered. And then the guy looks at me and goes, "I think we're done here. We don't need your services." I'm like, "I understand." And I didn't get it. And what's interesting is I returned to the company I worked for at the time and I had a good boss, bad boss. I actually write about my new book. Bad boss, steaming, "What the hell went on? That was so easy. It was a layup. You're a piece of—" Good boss is like, "What'd you learn from it?" Not a good experience. That's okay. I said, I wouldn't be ready. He's like, yeah, how about this? We're going to do practice questions. I'm going to give you all the questions and write them down. You're going to actually have a cheat sheet we're going to prepare. Then I don't know how much later after that, maybe 6 months later, maybe a few days later. I can't remember. But then I got the first sale and the confidence started to come. But I remember the fear. The fear. The other times that I have those, that type of fear where I go red and white is when my wife calls me Michael. It happened today. She goes, Michael. And I'm like, what? She goes, I can't find the mail-in ballot. I'm like, did I put it in the wrong mailbox? Oh my gosh. She was pissed. And I got terrified.

I was terrified. Well, um, that's hilarious. Um, I guess I'm just wondering if you have any advice, not marital advice, obviously, any advice you have for other entrepreneurs who experience severe self-doubt or imposter syndrome?

Oh, well, yeah. Welcome to the human journey. Yeah. I think the best thing I did was seek mentors, but in a unique way. I have a, a list of mentors that have different unique talent, but they're, it's not the holistic person. I thought, oh, I need the perfect person who's a great spouse, who's a great business leader, who's a great, great, and that person will be all my guidance. Well, we're, we're all humans. We're all flawed. Like if you, if you wanna learn how to write a book, maybe I can give some advice. Uh, but, but gosh, don't ask me how, how to, um, do detail, like to do accounting, you know, and a million other things. And so I sought out these people and I have one guy, uh, he is an extraordinary family man. He tried a business adventure. He was horrible at it. I would never seek his mentorship there. I saw him as a great business person, but doesn't live a lifestyle that's congruent with what I want. But has great insights there. And so I, I, with as best I can withhold my judgment of those other character elements and, and say, here's the one element I wanna learn from. That's been massive for me.

That's beautiful. So let's sort of a community of mentors around you. Yeah. Community mentors.

I even have a, at my home, I call it the heavenly board. Uh, my home office, this is the office office, but the home office, I have a wall up with 6 different historical figures and a famous quote from them. So Oscar Wilde, Maya Angelou, George Washington up there. And when I'm contemplating something, I say, well, what would these people say? Hmm. And by the way, you can cheat it now by going into ChatGPT and say, here's my board of advisors. Here's my question. How would George Washington respond to this? How would Maya Angelou respond to this? And so forth. And it blows your freaking mind. You actually have a board of advisors from these different historical perspectives.

Actually talking to you. That's amazing. Actually talking to you. I love that. That's a very good technique. Mike, what do you wish you had known earlier on your journey?

Um, I, I'm happy I didn't know more cuz I would, I think I'd be too chicken shit to, to do a lot of this entrepreneurial stuff. It, it's, you know, entrepreneurship is freaking scary. It's hard. Once you're in hell, keep going. So I'm happy I didn't know much more. I wonder, of course, in retrospect, I said, I wish I understood that it's about being of service. It's about impact. And when there's a congruency between your calling, what you feel compelled to do, and it's serving people, you become this unstoppable, gracious, powerful, good force. I wish I heard that earlier, but here's the deal. Ego Mike would've not heard it. I'd been like, no, whatever, whatever, old guy. Nice beard you got there. Walk on water. I would've been like, busting my own chops. Why don't you, why don't you eat a sandwich there, frail boy? That's what I would've said to me. Why don't you lift some weights? You big weakling.

I guess we always have to be ready for that, right? It's like you can't really know in advance what you need to know along the way. Yeah.

And, and aren't we blessed at not knowing in the first place? Yeah. Yeah. You wouldn't be where you are if you knew everything. No, no, unfortunately not.

No one would. That's so true. Yeah. Um, what advice do you have for other founders as they embark on their own journeys to grow into leaders?

Really know the, the reason behind the reason. So to me it's why are you doing what you're doing beyond the transaction? There's transaction, there's transformation. So one of my favorite stories, or one that picturizes this well, is Harley-Davidson. When I go to a conference and stuff, I ask, "Anyone have a Harley here?" And some hands go up. I'm like, "90% chance you got a tat on yourself right now that says Harley-Davidson." They're like, "Yeah, man." And I'm like, "Do you know you have the company's logo on your shoulder? That's my dream is for you to tat my logo on your skin." permanently. Let me explain. Harley has a transformational experience. So you can buy a motorcycle anywhere. That's a transaction. But when you have a Harley, it has a meaning to it. Weekend Warrior, you got a hog, whatever it may be, but it means something about who you are as a character. I think the greatest organizations understand that, that we are in character shift, we're in community building, we are in transformation, not transactions.

I love it. So wise. So much wisdom here. Everybody should get all of Mike Michalowicz's books. And particularly his most recent book, All In. And, uh, I just wanna say thank you. Thanks for listening to From Startup to Grownup. If you like what you heard, give it a review on Apple Podcasts so other people can find it. And if you know of a founder or someone else who is meant to be on this podcast, Drop me a line through my website, alisacohn.com.