In this 2010 interview, Sean, founder of StartupFreedom.com, talks with Mike Michalowicz—known as the "Toilet Paper Entrepreneur"—about his unconventional path to entrepreneurship. Mike recounts how, after a failed job search and a drunken resignation in 1996, he launched his first computer networking business. He later built and sold two companies for millions, but his overconfidence led him to a disastrous venture capital foray, launching seven companies in 14 weeks, six of which failed within six months. This low point prompted a self‑reflection that highlighted his most successful approach: bootstrapping with little to no money, which he later chronicled in his book. Struggling to sell the book, Mike sought help from internet marketer Yannick Silver, learning to apply behavioral psychology to marketing. He discusses the evolution of internet marketing from a wild‑west of simple persuasion to sophisticated behavioral influence, a niche his company Obsidian Launch now serves. Mike also reflects on the freedom entrepreneurship provides—flexible hours, confidence, and the amplification of personal happiness by money. He closes by promoting his book, blog, and newsletter as resources for aspiring entrepreneurs.
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Hey, it's Sean, founder of startupfreedom.com in today's on for an interview, we're speaking with Mike Michalowicz, the toilet paper entrepreneur. Mike has been featured on msnbc, the Wall Street Journal, Donnie Deutsch's big idea. He's a recurring guest on that popular show and more mainstream media sources because he's great at teaching people how to start businesses with no money. Mike has a ton of energy. You're really gonna enjoy hearing him talk. And he has a lot of great wisdom to share because he's made millions off his businesses. You. These failed businesses, I know you're gonna love them. Hey, Mike, you there?
Yeah, I'm here, Sean. How you doing?
I'm great. Thanks for being with us today. I'm really excited to have the toilet paper entrepreneur on my interview series here.
And I'm even wearing the shirt to prove it there.
That's awesome.
Yeah, yeah, something like that.
Yeah, it's right there.
That's a nice intro, by the way. I appreciate it.
It's a pleasure. It's a pleasure. I'm really excited to have you on. So I talked about some of your accomplishments in the intro. Maybe tell us how you got started out.
Yeah. I think this is kind of interesting because there's typically two stories we hear the one story you hear all the time. Sean is the rich guy. I was silver spoon. My father owned the company. I take it over, make it bigger, and it's the Donald Trump story. That's how he came into success. The other story you hear all the time too, is I grew up in a ghetto. I was spit on, beat up, punched by my mother, but I still turned around and became a multimillionaire. And that's the two stories we hear. But there's a third story, which is what I experienced, I think is a little more common when you think about it. And this is what it is. I had no entrepreneurial aspirations. I never wanted to be an entrepreneur. I grew up in a middle income, very comfortable life. My father and my mother said, when you graduate college, you got to get one job for the rest of your life and work for a big company. So that's what I thought was life. So I tried to. The thing is, I couldn't get a job out of college. I wasn't the greatest student. I was a B student, B minus student. I couldn't get a job. So I came back home and was working for a local computer store. While working for his local computer store, I went out for drinks one night. With one of my colleagues there. And I got loaded. I mean, I got fucked up. I'm sitting there, I'm like, I'm so much smarter than the guy I'm working for. I know more than him. I'm working my ass off. I'm making him money. I'm going to start my own business. And in a drunken stupor, I resigned drunk that night and started my own business.
You sent an email or what did you do? How'd you do it?
No, this was pre Internet. This was 96, so there wasn't really much email going on. No, I wrote a letter. I left him a voicemail and said, I got to talk to you tomorrow morning. Things are changing around here. I came in, this is the funniest part. His name was Anthony. I wrote a letter of resignation. And in my drunkenness, I still was sober enough to know that I didn't know what I was going to do. So I better get myself four to eight weeks of pay still so I can become a millionaire in four to eight weeks. On the letter, I said I resigned, but because I'm your best performing sales associate here at the computer store, I'm giving you eight weeks notice. And when I resigned, I gave him that. He says, you can't, you can't quit. And I was like, oh, I got him by the balls here. He's gonna give me like 12 weeks. He says, you're fired, kid. Just get the hell out of here. You're gonna fail. And he kicked me out the door. And that's how I got started as an entrepreneur.
That's a great start.
Yeah, well, there's an extra bonus too. I was 23, I already had my first child. He was born when I was 21, married still, same wife, still married to her with three kids now. But I came home saying, and we live in this crappy apartment and everything. And I said, you know, good news, bad news. I got fired. It's the bad news. Good news is I want to get fired because we're going to be rich. I'm building a company and that's how I got started. Me, my wife and son.
You started your computer networking business, you started your computer forensics, then you try to venture capital, Venture capital firm. What happened with that?
Yes, that's my big failure. That's the big X on my face. I built and sold two companies prior and I sold my second company for millions to Fortune 500. And this was after the dot com, so it was hard to sell companies. But my company was perceived to have Big value. I fell into the biggest trap out there. I believed my own shit. My friends would say, oh, you've built two companies, both of them into millions, both sold them for lots of money. And they said, you're Midas. My friends occasionally say, you got the Midas touch, man. You touched gold. I believed it. And that was the end of version 1.0 of me, because I thought anything I touched turned to gold. So I said, I'm just going to start investing in companies. I'm going to tell people all the smart things I know and just say, you go do this young lad and young lady and you will be rich like me one day. A real dick fool of myself. The money went by the wayside and it was collapsing. The investments I made failed and the businesses didn't get started up. I launched seven companies in 14 weeks. Six of them had failed in six months. I was still paying bills for those companies. They didn't even exist anymore is how bad it was. As I went through this and brought on anxiety, depression, I was, what the hell am I doing? I asked the right question. I said, what have I used to be successful? The answer came to me one day and it's grassroots bootstrapping businesses, it's the toilet paper entrepreneur. It's doing without. When I didn't have money, when I used no money, but used my mind, I was most successful. So I said, I should write a book about that. That was the beginning of the turn back up. And now business is trending the best ever. Not just financially, financially absolutely is, but emotionally too. I feel the most emboldened and the freest I've ever felt because I love what I'm doing.
I feel the exact same. And I can relate 100%.
Yeah, yeah. So, you know, as my business was as. So I went through my huge dip and as I was coming out, I tried to sell my book. It was kind of struggling. And I asked the question. I didn't say, why am I not selling books? Because that's a bad question. I said, how can I sell a lot more books? How can I get the word out? Because I really believe in my book. I think I wrote something that is really good, but that doesn't matter. What matters is the consumer mindset. So by asking the right question, the answers came to me. And I ran into some of these Internet marketers. But instead of just buying their system, I called one guy, his name is Yannick Silver. He was one of the godfathers of this. I said, dude, I've been checking out your Stuff. I love what you do. Is there any way I could spend just two minutes with you? I'll come down to your. He's in Maryland, I'm in New Jersey. I'll come down to your place. I just want two minutes of your time. I just want to shake your hand and just want to get any tip you could share with someone like me that's trying to move more bucks. Well, that two minutes, he said, yeah, come down. Come down for as long as you want. I spend a full day with him, we start building a friendship. I spend some more time with him. He comes down, he coaches me through an Internet launch of my book and he starts to help me introduce other products and my business starts ramping up and he turned me onto all this behavioral psychology. So the key thing to recognize about Internet marketers is a lot of it is seeped in behavioral influence and behavioral psychology. As I started understanding it, I started asking another question saying what aren't these guys doing that could take it to yet another level? And I really dug into behavioral psychology. I mean you can. I'll show you real quick. This is just from the last month. I'm sorry, last few months of books I've been reading about linchpin. Oh yeah, linchpin's in there. That linchpin isn't a behavioral psychology. That one is not good.
It's still a great one.
This book is a must buy influence.
Oh yeah.
So I bought that. But then tons of books like you haven't heard of get anyone to do anything. This is a classic. Why we buy the counter ones at home, why we don't buy. This just came out. Fascinate about why people buy on vices. All these books. Psychology to persuasion. Influence. Subliminal persuasion. How you can do subliminal messages. Yes. What their body message is saying to you. Just tons. Oh shit. There's way too many books here. But there's tons and tons of ways of using behavioral psychology. So Internet marketers use it. I think it's been somewhat like the wild west. And it was so easy to make it, it was so easy to find gold that they were just doing it. But it wasn't sophisticated. I think things are coming around and it's requiring a much more sophisticated market. Big customers, ebay is a client of mine now are using and interested in stuff like this in hiring companies like Obsidian launch to do this. So Internet marketers, you should pay attention and watch what they're doing. Very interesting. We also have to recognize there's a brand new group Coming. And it's the sophisticated behavioral marketers. And that's what my company, Obsidian Launch, is doing. We do behavioral influence techniques through online marketing and offline marketing.
How has starting your own business given you freedom?
Well, it's given me freedom of a lot of things, but with freedom comes responsibility. I can work the hours I want to work. I elect to work very hard because I want to build my customer base and achieve a new level of financial freedom where I can do even more things. It's given me really freedom in thought. And that means I've never felt so confident in myself as when I became an entrepreneur. There's a lot of value to that, I'll tell you. I've had a lot of money and I've had practically no money. I've experienced it from when I started to the pinnacle of my success, when I sell in my companies and back down a pretty good distance and back up. I mean, I've experienced it all. I hear it all the time. I never believed until I went through the experience. Money doesn't make you. Money doesn't make you happier. Money really amplifies who you are. So you have to be rooted in happiness and confidence and all that stuff. So the benefit of being an entrepreneur is the freedom of thought. It makes you confident in yourself. You know, everything that happens in your life is a result of your efforts. You elect to be happy or not. And with that freedom comes that foundational stuff, happiness and confidence and stuff that then the money, when it comes and it comes, it amplifies all that stuff in a very positive way.
I agree 100%. Awesome. Mike, thanks so much for your time. Where can people find you?
Oh, well, first of all, you got to get this. You got to get this book.
Buy the book. It's an incredible book.
Buy the book. Yeah, if you want to learn. And literally, when I wrote this, I shared everything I knew. I put my heart into this and my soul. So it's well worth. You can get a used copy on Amazon for like $2. I mean, don't not get it, but on Amazon or Barnes and Nobles, Amazon's got the best price. But if you want to find out More about me, toiletpaperentrepreneur.com is the place to go. Check out the blog for sure. On the left side. Navigate to the blog and there's tons of stuff. I give away every single day. Free tips and information to help you out. And if you can, if you're interested, sign up for the newsletter because you'll learn all about this stuff, which I don't know if you can see it, but it's the behavioral based email marketing. I share all the different little techniques and stuff about behavioral psychology and its use in email and online marketing.
I visit the blog, I even contribute to the blog as well. And I know and it's awesome, so I highly recommend it. Awesome. Mike, thanks so much for your time. It's been a pleasure talking to you, Sean.
