Got to Expect You’ll Have Challenges You Can’t See Through with Mike Watts

Welcome to this episode of the Million Dollar Mastermind, where we get real world insights on winning from people who have accomplished amazing things. I'm your host, Larry Weidell, and let's get going. I'm here with Mike Watts and we're having fun talking about being an entrepreneur and not being limited in your life. And he's explaining to me how he's evolved to his present situation and he had his first success and I think pillow trim. You said the sold for $6 million?

Yes, sir. Sold for just over $6 million to our largest competitor who ended up buying us out. That worked out great.

Yeah. And how many years did you have in it before you sold it?

7 years from the day we founded it till we sold it.

And what was the. Not to get too diverted here. But during that, it's easy say, oh, he started the thing, he went in there and boom, seven years later, $6 million. But were there times in there you thought, we're not going to make it. You know, we got, you know, you got challenges. What, what are some of the most hair raising moments you went through in that seven years and you survived to where you could, could get to the point where you could sell it?

Oh, we had so many painful times coming through there. We, we had, we were sued three different times for, for a variety of things, mostly frivolous. A couple from our competitors that were just trying to get us to leave the market. We fought our way through that. We had a product launch in Lowe's. Actually, Lowe's wanted to have something different than Home Depot. And so we made a design specifically for them. And along the way, our manufacturer used lower grade plastic. And we didn't realize until it literally just launched on the shelf that it was brittle and would break apart when people would use it and hit it hit something solid. So we had to recall all of that. It cost us over half a million dollars. We had to push about 200,000 pieces into the dump. And so that was very, very costly and expensive. So, yeah, we definitely had plenty of struggles and challenges along the way. I had to figure out how to put stuff, products on tv. I was, we made a lot of money selling products on tv. I didn't know how to build an infomercial. We wasted a lot of money on the wrong channel with the wrong, you know, mix of offers and things like that. But we kept trying until we got the right combination we could scale up so it wasn't without its, its pain and struggle along the way. And even selling the company was its own Challenge to try to pull off through the due diligence process. Took over a year to do that. So I don't know. There's. It's just. You gotta get a mindset where you're gonna expect that you're gonna have big challenges that you really can't see past. Walls literally in front of you that you can't see through. But if you just keep chipping at it and don't give up, you can find a way through or around most any obstacle.

And what was the worst one of those for you, personally?

To me, it was. We got sued by this guy in New Jersey that was. He was just a bottom feeder. And we. He just. All of a sudden, one day, a FedEx envelope showed up, said your class action lawsuit. Because our television commercial had said that you could get free trimmer line for life if you pay shipping and handling. Anytime you order it, it was like 499, and we would send you a bundle. Bundle of lime, right? And he's. He literally on his own, filed a class action suit against us. He did it to every infomercial product on tv. And so he sued us and then wouldn't, like, was like just trying to get us to settle and write him a check. It was just him sitting and eating Cheetos in the. In the living room, suing people because he's a lawyer in New Jersey, can get away with it. And we were. To me, it was a very personal attack because he was trying to take. We didn't have much money at that time, and he was trying to take what little money we had and for no good reason at all. And so we were. Fortunately, I found a lady in New York that was sympathetic to our plight at a very big firm, and she was able to. We ended up negotiating down and still paid him, like, over $10,000 just to go away because it was just a good business decision to do it. But that whole process was emotionally taxing on me. And so I kind of got a special place in my heart if I ever get a chance that. To try to seek some reform in that respect, because there's a lot of small businesses to get taken advantage of. But at the end of the day, even if we can't change that, you got to understand that there's going to be financial things that come along that are hard to deal with, but it's kind of a tax you got to pay. You got to expect you're going to end up in court sometime. You got to expect that you're going to have Big financial hits and, you know, chargebacks from retailers or whatever it is, things that aren't going to go your way. That's just going to happen.

Yeah. And it's the kind of thing is when you're. Like you said, first of all, it follows you don't think of it when you're starting out, but it follows that if you're going to get a product that is useful or needed by everybody, then you're going to be dealing with everybody. And you have 100,000 sales. Unbelievable. But then you're going to have one of those 100,000. That's the one out of 100,000 that's really toxic and has always been toxic and is always looking for someone to torment. And that's, you know, and so, like you say, you just have to have it and build it in your consciousness. You know, we'll hire someone to handle that. Boom, boom, boom, boom, boom. And we're not going to go through this thing unscathed. You know, you. Everybody gets scars. Everybody has frivolous lawsuits. You know, if you're in business there, you just need to know there's people that will sue for anything. And so you can't take it serious. Like, how dare they. You know, I use, I. I used to just go through the roof with like these kind of things. Why, you know, how you know me, you know, perfect this, that, the other. And then you find out, no, you're just like, you know, they're going to wipe their. Their feet on your back just like they do with everybody else. Some of them are going to get away with it. Some of them are real good because they spend their entire year being sleaze. I mean, his entire life being sleaze balls. And so, you know, if you're out there dealing with a million people, what do you expect? You're going to run across one of these people, you know, and so just deal with them as. With as little emotional wear and tear as you can. And it's easy to do that, be philosophic about it if, you know, going in. And that's what we're trying to do, right? No going in that you're probably going to be in court, you're probably going to have a frivolous lawsuit things, and you're probably going to have things with your product, with your manufacturer screws up, and then everybody's looking at you and, you know, it was a shock to you, too, and you may have to throw 200,000 of them away. You know, just.

There's always something for sure. But, you know, each one of these experiences, you know, sort of led me to where we are today, which is why I manufacture my own product. I'm tired of taking, I take the, I've de, risked myself in that respect. And we literally manufacture the Love Handle products here in our building, really in Houston, Texas. And so we can look at our customer in the eye and say, you know, we know this is a great product because we literally made it ourself. We know we're going to have it when we tell you we're going to have it because we have the, we have the automated equipment to make it was a big investment and a hard path to take. But, you know, coming through Covid, we had no supply chain issues. We were able to stay in business and keep our, our team, you know, intact for the most part. And that's not why I did it. But at the end of the day, it gives me a lot of great pride to have a team of 25, 25 full time employees here that manufacture this product, that we have a culture. And all of that came out of my frustration with overseas manufacturing and the low quality, you know, just tendency of them to go low quality all the time. So, you know, you never know along the way you're going to learn, learn a lesson and then it's going to help you later on. So don't scoff at the lessons and.

Talk about how you moved on. Did you already have your next step in line when you sold pivot trim?

I had a line on the intermediary company. We have another one that I still own today called the Tree Stake Solutions. And I've always had a big passion for trees and so I licensed a patent. I kind of figured out this model was, was pretty smart, right? So I find people that are great inventors and have a good product but don't know what to do with it. And then I'll. Rather than me trying to come up with an idea, let's go find one that already has intellectual property tied to it, license it, and then I'm right in business day one. And so we have a patent on an underground tree stake that holds trees straight up and down where they're planted. But there's nothing above grade for kids to get hurt on and it's better for the tree and easier to mow around and we still run that business today. I licensed that one almost instantly when I sold the company and. But then right after that I ran across the, what at the time was called the sling grip, which was just a Smartphone grip that a guy in Minnesota, John Murphy, had invented. And it was a stick on phone grip. And that was just right when the iPhone came out. Yeah, the original iPhone3G back in 2014 when we started this. And he had, he had developed it because him and his wife had just gotten married and had these really fancy glass phones and were went to vacation in Kauai for their honeymoon. And so he took a driver's license and a piece of elastic and cut them and built him a grip and glued it to the back of his phone so he could hang on to it when they got back from their honeymoon. He filed for patents on it, started making them in his basement. I got ahold of one real early. A friend of mine sent it to me, said, hey, this is a pretty cool idea. Next thing you know, I'm on a plane to go meet the inventor. By the Friday of that week, we had a license deal done and that started our relationship of now has become Love Handle. And we have gone on to create more and more products as a partnership. So what I do is I give him the ideas. Like, hey, you know, like the most recent version, the left Handle Pro. Give me one that'll do a portrait kickstand. It's got, it's got a kickstand that'll hold the phone up portrait mode and be stable. I also want to be able to change the strap for a new style or wash it for sanitary reasons. And I want to be able to have magnets inside of it so that it will stick to anything. Yeah, I don't. I'm not smart enough to figure out exactly how to do that, but he is. And so he goes and does all these iterations and then not only builds the product, but then builds the machine to make the product and then delivers us the machine. And so now we can manufacture this at scale, in house with intellectual property tied to it. And so it's one of these things where like, like a marriage is, is like a 1 and 1 plus 4, right? Where the whole is greater than the sum of the parts. It's very much that way for me in business. And if you look at a lot of great companies out there, you know, you got, you know, Steve Jobs and Steve Wozniak. Wozniak. And you know, on and on and on it goes.

Jobs could have never done what Wozniak did, you know, because he didn't have that kind of brain. But Wozniak, vice versa, was not a marketer. You know, he was going to be sitting down in the garage and fiddling and piddling, but you needed both. You need somebody, take it to the world. And, you know, it's not unlike. One thing I try and do on this podcast is let people see the similarities and the threads of winning and success, the patterns and strategies that are similar in a lot of different areas. For example, the first thing, one that pops into my head while you were talking there was, like, in songwriting, you. You have the melody and you have the lyrics. Well, you know, Elton John has a writing partner called Bernie Taupin. And Bernie, they used to be in the same. Both in England, but long since Bernie Taupin moved to San Francisco or someplace. And, you know, I don't know if they ever see each other in the last two or three decades. But anyway, they still write songs together. Cause Toppan will come up with the lyrics and he ships it over to Elton John. And Elton John will go. They say he never does anything until he goes to the recording studio and he has all the musicians there, and everybody's getting tuned up and, you know, they're running the wires and checking the knobs. And he'll go over into a piano in the corner and get these lyrics from Bernie Taupin and go, boom, boom, boom, boom, boom. Okay, I got it. 20 minutes later, they. They go out and there's a hit song, you know, but he couldn't come up with that. It's like whatever melody, those lyrics from that one guy. I mean, he could get lyrics from anybody else, it wouldn't necessarily trigger those new melodies in his head. But if Bernie Toppins sends him a lyric and he goes over there and he's in the environment, the musicians are there and the pressure is on. He looks at it, all of a sudden, the mind goes. And he comes hit after hit after hit after hit after hit. And they still write that way, you know, now. So the thing is, like, you find something that works, stay with it, you know, and that's what you've done here, right? And that answers the problem. You know, you say, well, how am I going to find that kind of person? Well, you go as far as you can with what you have right now, and eventually you'll probably run into. For example, a example of that is you get a phone call from Damon John.

Yeah, absolutely. Yeah, it was a. We've all. You know, I'm sure a lot of your listeners probably have seen Shark Tank and are fans of the show. I'm a big fan myself. And. And when it first came out, I was. I was really excited because I was like, well, this is. It feels like destiny. Right. Like I need to be on this show. Right. And so we went and auditioned. We were at the Consumer Electronics show with the Love Handle product. And they had open call for Shark Tank. We. Casting call. I was like, oh, let's go.

What year is this?

So that would have been in. Let's see. And my wife will tell you, my, my memory is terrible, terrible when it comes to this kind of stuff, but I want to say it's. You're looking like 2015 would have been the time frame. Yeah, okay.

About seven years ago.

So we were, we were early on. So no, tomorrow 2016 is when we finally audition. Yeah, 2016. And then, so we auditioned and then the producers loved it. They loved the product, they loved our story, our passion. We were kind of kitchen and fun and. And so they put us through to the second round of auditions and we were super excited about that. We had to create a video so they would see how it would be on camera. Fill out a hundred page, act literal, 100 page application in blue ink and all. Every detail we could think.

100 page application. Good gracious.

Yeah. Everything from like our background to. Have you ever met a shark before? Have you have any litigation going on? Tell us about your product and your revenue and your customers, like every single thing. It was kind of a healthy exercise to go through.

Sure.

And I was like, well, this is going to prepare us to go on TV and pitch our product and, and be an overnight success. This is great. And unfortunately, they didn't see it that way. And for whatever reason, I guess we have a face for radio because they decided that we weren't right for the show and declined us and turned us down. And emotionally, it was really a big letdown because I thought we had the perfect product and I wanted to go on there and literally Damon John was the one I wanted to do. It was the him or Mark Cuban I wanted to do a deal with.

You had that instinct there. You had that instinct and now. But you did that twice, right?

I mean, you know, two times. Yeah. So the next year we went the same thing. Like Groundhog Day. We went the exact same deal. Producers loved this second round of auditions. And then they, they declined. But, you know, through the process, they told us a few things. And I think your listeners should hear this because being a rule breaker, sometimes it pays off. Right, Right. So they were, they told us, don't send anything to the set. Don't send any products to the set. So what did I do? I Sent products to the set every single week. I was constantly sending products, some of my products, because I knew my product was viral and could potentially. Now, maybe that's why they didn't put me on the show, because they had already seen it or something. But either way, what happened is that Damon gets one on his phone, he falls in love with it. He goes back to his offices in New York. People in his office want them, so they're ordering them on my website. I noticed.

Let's hold on that for a minute. I want to hear about that. But talk about the mentality of being turned down twice because, you know, you already. You already. You've known since you were in junior high that you're a great salesperson. I mean, you. You can sell candy for a quarter and get you in front of someone, it's a done deal. But to get to be turned down like that twice, how did you internalize that in terms of your future before the call from Damon and all of that? How did that linger affect. Did it linger? How did you interpret it? What did you say to yourself? Because people are going to go through that themselves. You know, not everybody's just, you know, not everybody is. Gets the hit first time out. But what did you say to yourself that allowed you to keep on going?

Yeah, I'm not Superman over here. I'm not bulletproof. And I. And I go through downtimes and valleys as well. And that was most certainly one because, I don't know, I felt like it was destiny for me to go to there, and I really felt that. And I put. We put a lot of effort into creating a video, like, weeks of time. And because we. And I'd already seen, like, I visualized myself walking down the carpet and how the pitch was going to go and that I was going to have enough sales or Mr. Wonderful wouldn't tell me he's going to take me behind the barn and shoot me or crush me like the cockroach that I am. And then when that didn't happen that way and we didn't get that shot to be on Shark Tank, it was. It was hard. And. But for me, you know, I'm. I'm a man of faith. And so for me, I just kind of prayed about it and I said, you know, I'm going to just be humble and be where I'm at and be happy, look around me and try to find the things that are going well for us, and maybe this is not the way we're supposed to go. And, you know, I just Kind of got through it one day at a time, just get back into the trenches and kept working on my business and kept doing and said, you know, I don't. Maybe this is not the easy way. It's not, not necessarily the right way for me, and maybe we need to hold onto the equity of our company or, or who knows what it is. Right. And so that's, that's how I got through it.

The thing is, you know, you started off, we were talking about you've got to expect you're going to run into challenges you can't see through. And, you know, this is one like, why is this going to turn out good for me? As opposed to having that kind of deal with that kind of person being able to slingshot you forward. It's hard to say, no, that's not necessarily, that's not going to happen. And it's hard to interpret that as a good deal for you, but yet it turned out that way and you got through it. The point that I wanted to bring up here is you already talked about earlier, you said it, and we're coming back to end this segment with it, is you get through it by chipping away at it one step at a time. You know, you can't make the big obstacles go away, big problems go away, but you can take the next step. You know, one of the things I made a big deal out of in my book serial Winner is the fact that you can always. And this is, this is the thing against ever quitting, because we always know where the next step is. No matter how black it is, you know, you always know the next step. Even when you're, you know, you're on the mountain in a white out and you say you can't see anything. Yeah, but you can see, you know, maybe a foot in front of you. You know, you can move forward a foot and you can make one step. There's one more call to make, one more person, you know, one more question you can ask, and that moves you forward because a lot of times moving forward change puts you in a different thing where it changes your perspective on everything. And so I just thought before we get into the good news about the phone call from Damon, you didn't know all these things were happening behind the scenes. You just knew. Door was slammed shut. But what you responded, which we all need to, we just can't. I'm saying this for your benefit, my benefit, everybody's benefit. We can't remind ourselves enough, especially when we're the leader, that a lot of people looks to for, you know, they, they really monitor how we respond. You know, how our eyes blink, our shoulders slump or they don't slump, how fast we walk or whatever. And know that the toughest times is when they're looking at us the right most. But if you keep your head, you know, you stay on, you keep it in your head what you're going for and you keep focused on, well, I can't get that, but I can, but I can't do that. But I can do this. I can do one step, you know, I get one step closer and maybe I'll get wiped out, but I'll be one step closer before I get wiped out. You know, that is how winners win. Because winners don't have happy days every day. You know, winners go through the nasty days that everybody else go through, but they keep on going. And sometimes it's just one small, slow, grueling step at the time. Sometimes they're crawling on their knees but the winners are still moving forward, you know, and that's what you did and it turned into something great. And we are going to talk about that in the next episode. Thanks so much Mike for sharing this with us.

Thanks Larry.

That wraps up this episode. Consider leaving a rating and review if you like what you heard. In addition, I have a free video for you and it contains my best insights from 20 years of running my own business and also coaching million dollar earners. You'll find it@whitelownwinning.com webinar. Thanks for listening and do it big.