What Can Your Business Learn from Taylor Swift's Success?

Entrepreneurship is hard, but the process can be simplified. You can achieve success faster, sooner, and easier. I'm Mike Michalowicz, and I'm on a mission to eradicate entrepreneurial poverty. My goal for this episode and every episode is to serve you on your journey. Let's start right now on Entrepreneurship Simplified. A lot of throat clearing. I'm already recording. It's a lot of—

This must be so pleasant for the sound engineers. Right? To hear that.

So my wife plays a joke on me, or not on me, but with me. Whenever I clear my throat, she'll go, "Yes, do you have a question, Michael?" And I'm like, "I'm just clearing my throat." I love that.

I love that kind of nudginess between couples.

Do you?

It's good stuff. Yeah.

You know what's nice about nudginess, in my opinion?

Yeah.

Is it allows you to vent at a very low level so it doesn't accumulate into something.

Ah, did you ever tell anybody to stop it when they're sneezing?

No, it's a good one. Do you do that to your hubby?

No, but I've heard other people do it.

Stop it. How my, uh, daughter-in-law, um, said— I think it was to her, Tyler, my son, or maybe it was to Krista— they sneezed and she points, he goes, "Witch!" So I thought that was funny.

That is funny.

Yeah, it was very cute.

Did I tell you that, um, this is totally not related at all, but I did want to mention it to you, um, do you play the banjo? I know you play the guitar.

I do not.

John picked up the banjo. Oh, he's self-teaching himself and he's got the fingerpick thingies, which I didn't even know was a thing, that you— that's really how you play banjo.

What a great instrument.

Yeah, yeah, he's loving it. He's really into like really, really old-timey folk, like, yeah, I'm talking 1920s, like old-time bluegrass type stuff.

Oh my God, and how far has he progressed?

He's got a couple songs, he can play a couple songs, but he doesn't have a ton of time to practice since he's a college kid. So great.

Yeah, way to explore that. So, uh, to our listeners, you're listening to Entrepreneurship Elevated. I'm Jordan Studio with Amy, or by Amy Cartelli, a great friend. We just returned from a retreat together.

Fantastic time. And you did not leave me on top of a mountain.

No, like last time when I was—

yeah, no, it was fantastic.

Yeah, I did not leave you in the mountain. Um, and I had the opportunity to see Chris, your husband, on the way out. I stopped by and I told you, uh, face to face, but now I'll say it on air, just a lighter guy. Yeah, uh, because he made this job transition and it sounds like he found—

he found the place that no longer sucks his soul but really feeds him, uh, creatively and And, you know, he is not an entrepreneur. Well, he is an entrepreneur. He has his own consulting company, but this particular job is with another company. But wow, what a difference the right culture can make, 'cause that's what he's discussed. He's working with, he's had this experience once before and he thought finding another company again that was like that was gonna be the magic unicorn. So he's very thrilled that he did find one. Yeah.

It's so great.

Thanks for noticing that, Mike.

You're welcome. And it's so interesting, the cascading effect, a great work environment, brings a great sense of comfort, and that can bring or facilitate a better home life, uh, outside experience.

It facilitates, I think, for him too, more creative solutions. You're— something about relaxing lets you open up to possibility and potential in situations. I promise it's, it's a whole new, whole new ball game.

That's great.

Thankfully. Yeah. So today, Mike, we are going to be talking about lessons from Taylor Swift.

Yeah.

Are you a fan?

I'm not a Swiftie. I'm an admirer.

Yeah.

In what she's accomplished. Um, I am fascinated by the business model and how she's sparked a community around the Swifties, right?

The, the community.

Um, but also there's interesting— there, there's such a defensiveness in that community. Sometimes there can be vitriol and stuff. So that's really interesting dynamic. How does she navigate that? Yeah. How does she keep her clients engaged, but not from going too far, which they have had the tendency to do in certain circumstances. And in retaliation and protection of her, um, I am going to see Taylor Swift.

You are?

Yep, in December. Uh, I'm gonna go to Vancouver. Krista and I are flying out to Vancouver to see her perform.

Is this Krista's wish?

No, no, uh, it's, it's a mutual wish. So I, I love her music.

Yeah.

And I have an opinion. I don't necessarily think she's the best music writer or the best songs in the world, but I think collectively her talent, her persona, and her music collectively is the best ever. Like, you know?

Yeah.

Um, and I really do like the music.

Right.

My friend happens to be the mayor of Vancouver. Wow. Yeah. And we're gonna talk about in a future episode, we're gonna talk about masterminding.

Mm-hmm.

My friend Ken Sim is his name. Ken Sim is my— is in my mastermind. And one of his aspirations was to become mayor, and he's become mayor of a major city, Vancouver.

Yeah.

Well, he has the mayor's suite at the concert. He said, I can invite some friends. You got to pay your own way and tickets, but he's like, you can sit with me.

Nice.

So we have an amazing seat and some celebrities may be— maybe joining you or not. We don't know.

Right.

Can't wait. Maybe, maybe, maybe, a long shot, I can brush elbows with Taylor Swift for a second. I doubt it.

How awesome! Swiftonomics. That refers to her economic influence that she's had. She's had an impact on various sectors. Her performance as part of the Eras Tour has had a positive effect on local economies. The power of Swiftonomics lies in Taylor Swift's unique influence and business choices. Her work has had an impact on global economy and relates to international trade and globalization. So for instance, when she did her Eras Tour, the governor of Illinois announced that Illinois had broken its hotel revenue record. Yeah. And the California Center for Jobs and Economy estimated that the tour would result in a $320 million increase in the LA County GDP, an increase in employment by 3,300 people, and local earnings by $160 million.

Yeah.

Incredible what she's been able to bring forth to these communities that host her concerts.

Yeah, one person. But, but the other thing is, is she one person? She is a brand.

She's a brand.

She's represent— representative of the brand. And so Chris and I went down to Long Beach Island. We do it every year. It's our favorite place to go. We rent a, a house down there and bring our family and stuff. Taylor Swift was down there, uh, 2 or 3 weeks prior to us getting there. There was a wedding that she attended. I think it was her song producer, whatever. Half the island had to shut down for her security and so forth. What was interesting was some of the feedback was, Taylor Swift ruined my vacation. I was down here and I couldn't do anything.

Right.

So I questioned, did she ruin your vacation? Because you have a story you're talking about, you're really engaged in it. It may be it brought some excitement element, another element. But the surge of of people that went there because they catch a glimpse of Taylor Swift, right? But in that economy. But then there's this post-Swift wake. Oh, Taylor was at Parker's Garage. That's one of the restaurants. Yeah. I'm going to Parker's Garage.

Yeah, yeah, yeah.

And so there's all this consumption.

Yeah. And lingering consumption.

And lingering. That's it. So did Taylor Swift really ruin vacation or did she bring some kind of mystique and interest to it that now you and I are participating in a different way?

Right.

And have a story to tell. And have a residual story to tell. The residual economy, right? I think it's, it's pretty fabulous. Yeah, there's an inconvenience, right? But when I go to New York, uh, and the UN has a meeting, you— my gosh, you cannot get around. Yeah, I don't go like, oh, the UN's ruining everything. It's just like, this is the natural course of what the UN does, right? And, um, it doesn't affect me in that perception. So I, I don't like when people have that, that blame it on someone else kind of mentality, right? But I was, I was blown away by the impact of this, this brand, this Taylor Swift brand, and, and in that, never realized this residual or lingering effect for the economy. There's a story that may— I wonder if next year people come here and say, oh, the reason I'm going to Parker's Garage or wherever the wedding was, you know, Taylor was here last year. I wonder how long, how much that'll last.

That's interesting. Well, love her or hate her, you can't deny that she is a savvy businesswoman. I know she's, she's made some really interesting choices along journey. And, um, let's talk about some of these. Okay, so I think our first lesson is from Taylor Swift is building a strong brand. Be authentic and build a brand that resonates deeply with your audience. So she started off as a country music star.

Yeah.

And transitioned into pop, and she has consistently built a brand based on authenticity and connecting with her audience. And, um, her music tells relatable stories. I know, like, I'm not a huge fan, but I have always enjoyed her songs, especially her younger songs. As a young woman, I found them all very relatable. There's a story in there. There's also these shared experiences, and she's definitely really good at getting those to music. Um, and it's helped her cultivate a fiercely loyal fan base, the Swifties.

Yeah, which I presume is predominantly exclusively female. I don't know.

No, I don't think so. I think Swifties are male and female.

Male and female, I think.

I don't know, but I think—

I don't know. A couple things about a brand. One is relatability is key. I, I attributed to John Jantz. He wrote a book called Duct Tape Marketing. I believe he was the first to have this concept of no like and trust. No like and trust.

No like and trust. Yeah.

Oh, K-N-O-L-I-K-E-N-T-R-U-S-T. So what no like and trust is, is if you are to do business with me or vice versa, you're the consumer, I'm the seller, that you have to first be aware of who I am. That's the no. Like is that you have to have an affinity that I want this, because if you dislike, you're going to avoid. And trust is, do I feel confident that he's going to deliver on his promises? So John Jantz argued we have to have this no like and trust in place in order to have a transaction. Well, there's another stage to this, it's relatability. And I think that actually is the foundation for all of it, because you may know me, you may like me, and you may trust me, but you may also say he doesn't get me. And if I don't get you and someone else gets you, there's a stronger affinity, right? We like people who are like us. And I think what Taylor Swift has done through her music, but all of her brand elements, in my opinion, highly relatable. I can't relate to her life's experience now, right? Nor can anyone else, because she's, she's the one of one.

She's it, right?

She is the unicorn. But the story she tells, her background experience, the way she presents herself, she's a Pennsylvania girl.

Mm-hmm.

All those elements bring about relatability. And when we can relate to a brand, we say, oh, that person is a part of me. It's an extension of me.

Right.

And so I think the Swiftie community And the Swiftie, um, removed community, which I consider myself, right? I'm definitely a fan of hers. Right. Um, I think it's because there's a relatability and say, oh good, there's a spokesperson for me.

Yeah. Yeah.

I watch Taylor Swift come into an audience, for example, on stage, and she has this perceivably very genuine appreciation for, wow, these people keep showing up. You can just feel it and see in her.

Yeah.

There's an She's odd and inspired by putting on an awe-inspiring event, but she is for the audience. And to me, that's relatable. Like if I had the opportunity to walk onto a stage of any size, that's the feeling I would invoke. And if you did, I assume the same thing. Like all these people are here because Amy Cartelli is here. There, there, there's this cool relatability.

Yeah.

As opposed to other brands in this space, other individuals that come up and like, oh, you're lucky that I'm listening.

You're lucky I'm here. Yeah, exactly. Exactly. All right, so lesson number 2: Owning your product. Take control of your intellectual property. Taylor so famously fought to own her music masters and re-recorded her albums to retain ownership rights after a public legal dispute. This move not only empowered her but also empowered her fans to support her journey. Um, this was huge.

What was that guy's name? Do you remember?

No, and I just actually— Dylan, something like that. I saw the— I saw a clip earlier today, and now I can't even pull up his name, but Yeah, yeah.

It's interesting. I listened to— there was a 5-part podcast series about Taylor Swift I listened to that went just through her journey. And what I took away from this, trying to be impartial, is this guy, whatever his name was, had legal rights to the brand of Taylor Swift. And as long as he maintained the rights and he— and it was designed for life, he gets a royalty or percentage of it. So every time his songs sell, he gets a percentage.

And he was—

he's a young guy himself. Right now he's probably in his late 30s. Early '40s.

Wow.

Basically, she signed a contract not knowing what she was signing to. And so there was a division between the two of them. What he starts doing, which sounds very nefarious, was selling his rights to another company but also embedding himself in so that Taylor Swift felt like on the surface level she was no longer dealing with this guy. It's a new company, sure, new terms. Yeah, but he was, he was still hidden in there. Yeah, he's baking himself into every transaction, right? So finally She's like, I've had enough. I'm going to do the ultimate thing. I'm going to re-record every single one of my songs, a new version.

And I think that was based on a suggestion by Kelly Clarkson on social media. Like, you should just record all your albums and just tell your fan base to buy your albums under your—

So powerful.

Incredible.

Particularly nowadays in that brands like this, once something's created, it may not nowadays, it's always been this way, but like a book, once a book is made, it's just pushing the print button and the next book comes out. So there's no additional contribution from the artist that made that original book or that original song. And so whoever has the, the rights over that, all they have to do is push a print button, right? And some money comes out, whatever portion is on their side. I think many people would say, I, I guess I lost out on my life's work. But the fact she asserted authority, it reminds me of Simone Biles in that when Simone was on the Olympic stage, not this most recent Olympics, but the prior, and she says, "I'm not going to compete for my own mental health." She was the first person of that magnitude, that recognition to say, "I'm going to do something that's truly in the best interest of myself and my sanity." And I think she opened the gateway or the door for others to say, "Yeah, my health matters." Right. I wonder if Taylor Swift set the standard for others to say, "My intellectual property is mine. I created this and I have the right to own it, protect it within the law. And she did within the law. If you want to call it a loophole, she found it. But I think she empowered us to understand the importance of possessing what you've invented and created.

Did you, did you, um, use an attorney when you were a young entrepreneur? I mean, to, you know, well, you were writing books, so there's copyright involved there. But I'm talking about like other, other entrepreneurs who have unique ideas. I mean, it's important to secure an attorney to help you.

We do it way too infrequently.

I was going to say, it seems But we can't afford to do it.

So there's this thing. There's also a diminishing perception of our value. When we'll leverage Taylor Swift here, whatever her first big hit song was, the first time she was strumming out on a guitar in her bedroom, wherever she wrote the song, it's like, oh man, I got something here. But that's really the value is maybe I have something. It's valueless. When we start a business early stage, we're like, maybe we have something here, but we don't see the value. We can't predict the future. So we devalue it. I wonder— can't speak— but when she wrote that song, if someone said, oh, you know what, I can get that distributed to some degree, why don't we share 50/50 in it? We see such little value. It's like, well, it's not worth anything anyway. What do I have to lose?

Right.

But then when it hits, it's like, I have everything to lose. Yes. So small business owners say, I have an idea, but, you know, if I get this partner in, just contribute a little bit, that's going to— that could make all the difference. I'll give away stuff. So you'd be very careful of that. What I encourage entrepreneurs to do is never, ever, ever give away equity. Never give away equity because we think the equity is worth less and in the future it can be the most valuable thing you have.

Gotcha.

So negotiate other terms.

Okay.

I want to bring on someone that's very influential or helpful that could help the company, but I can't afford to hire them. My default thought used to be, well, here's 10% of the business for 20%, you know, upside. But now, regardless of their participation, If it fails, they own 10-20% of the business. So now I approach them and say, "Well, what can we do to compensate you on your success?" Maybe you take a percentage of the revenue you generate or the way you participate, but you're not going to get equity. And that's been way better for me and actually for them too, because they still win if they contribute, but it protects me.

Smart. All right. Next lesson, direct connection with your audience. Lesson is cultivate a direct relationship with your customers. She often surprises fans. Taylor Swift often surprises fans with personal gestures like handwriting thank thank you notes or attending fan weddings. She also engages directly through social media, fostering a deeper, more personal connection. So prioritize building direct connections with your customers then.

Yeah, yeah, yeah. And not easy, but it's not an all-in or all-out, um, and I, I practice this too occasionally. I used to do it all the time. I'd send personal videos to people thanking them. Now, due to demands on my schedule, um, I don't do it as frequently, but occasionally I'll say, hey, let me send out personal videos because I have the time slot to do it.

Sure.

What's so interesting is a small business has usually as a resource extra time because they don't have as much demand, so they can do this personalization. But then as they grow, there's no time except for delivering services and the personalization goes away. So those Uber fans in the beginning say, I've been abandoned. Yeah, it used to be so good at service. Your service sucks now, right? We become a victim of our own success. But what Taylor Swift does, I think that's so smart, and I have another celebrity that's done this, is by doing this personalization occasionally, it builds this storyline that, that gets shared. So the fact she attended a fan's wedding, that fan's wedding was remarkable and blown away. But that story has affected all of us, right? She may show up. She does still care. Yeah, there's an interpretation. So that having the personalization, even if you can't touch each person personally, they are going to be touched because that story becomes part of your— what's that when the story circulates? What's the word? Folklore.

Yeah, yeah. Smart.

Here's, uh, the person that's now in folklore in my mind. Bobby Flay, that's the chef. I don't know anything about Bobby Flay. I really know nothing about him. I know nothing more about him. Um, seems fine on TV. He's not the Gordon Ramsay, like, in-your-face guy. Just seems like a nice guy, right? I heard a story, and now I'm like, Bobby Flay is my favorite chef ever. He was on a flight from wherever to wherever. Private airplane.

Okay.

And an assistant said, oh, there is someone in the Make-A-Wish Foundation that reached out. There is a child who is terminally ill and their final wish is to learn from you or get some— just to hear from you once because they love cooking. He said, redirect the flight. And man, oh, right. Yeah, it's amazing.

Yeah.

Yeah. Right. So we don't know the story. We're both tearing up right now. This guy, what a remarkable thing. So he lands and he gives a personal cooking class with this child.

Yeah.

And I'm like, Bobby Flay, my God, you're like the best guy ever. We're getting emotional over a thing that we didn't see. We didn't see. Never. It's just a little folklore. It's a little vignette of his life. And maybe it's not even— maybe it's spun some way. Maybe that's not the full truth.

Right.

But I think that is the power, is those moments where you do something extraordinary for someone. Can build a reputation that spins on forever as of excellence. And I think in Bobby Flay's case, if that happened or some variant of that, it was genuine and it's representative of who he is. And when Taylor Swift goes to the fan's wedding or writes a thank you note, it's not for the PR, it's because it's a genuine contribution. And that's the best PR.

Yeah, absolutely. I love the heart behind that. And if there's integrity behind that, that's amazing. Yeah. And that's everything.

And I think that's everything. I think that's the lesson here. Do good upon others because it's integral to who you are. Not because it's a PR opportunity, which ironically becomes the best PR.

Exactly, exactly. Okay, lesson, uh, number 4: embrace innovation. Adapt and innovate to stay ahead. So Taylor embraced digital streaming platforms like Spotify and Apple Music, but on her own terms, negotiating better royalties for artists. She also used surprise album drops during the pandemic to stay relevant and keep fans engaged. So stay flexible, adapt, stay flexible, adapt, innovate, grasp new technologies.

I'll tell you who did it badly was U2.

U2. Really?

Yeah. Do you remember, uh, this is— I don't know, this was pre-pandemic, maybe 10 to 15 years ago, Apple phone.

Yeah.

So I don't know how— maybe 10 years ago, and you woke up one morning and the YouTube album was on it. They forced it on everyone that had an iPhone.

Oh, the U2 album.

Okay, did I say YouTube?

You said YouTube, but I, I mean YouTube. I'm getting it. Yeah.

Okay, whoops. The band U2. U2. There we go. So here's what's ironic. There's a gift and then there is a marketing piece. And even though it's the exact same thing, U2 perceivably did it as, here's who we are, you have to have this. They forced it upon us, where Taylor Swift gives us a new platform to choose to receive it in a new way. There's a radical difference there.

Yeah.

The other thing I think that's interesting is I think it's not emphasized enough. Taylor Swift and the team that surrounds her, which I don't know who her team is, they're extraordinary business people. I think it's undeniable that she's talented, but some people are like, "Oh, she's not the best singer in the world." No, she's not the best guitarist. No, no. But she is this collective of extraordinary talent matched with business prowess that you don't see too often.

Right.

And I think that is the power of the Swift brand. In that she's looking at all the opportunities to be of better service to the consumer, to approach them in a new way. Where are they moving and how can she— and when I say she, it's, it's not— there's got to be a team around.

Yeah, I was thinking like, how much is this, how much of this is her, how much of this is a, is a team or the right people hired for the right jobs within her brand?

Yeah, yeah, it's a great question. I think this is a bold for me to guess because I know nothing about her organization. I think it's like ours. So we, just to give context to our listeners, we're a small business. I think there's 8 of us. Okay.

Yep.

I am the spokesperson. So to the outside world, they almost exclusively know, if they do know of us, which most don't, but if they do, they'll know Mike or they'll know a book title and that's it.

Right.

And so then the perception is, oh, Mike is doing it all.

Yeah.

It does feel a little bit like the Wizard of Oz behind the curtains. But the reality is I'm the spokesperson, but the— I'm mixing metaphors here— the drummer of the band is Kelsey, right? And the guitarist— lead guitar solos are done by Jenna, and Andrea is, you know, our bass. I guess keeps the rhythm going, whatever, however you want to do the analogy. But there's this collective team, right? But when you have a personal brand, it emulates around an individual.

Mm-hmm.

There's something else also very interesting about a personal brand. When you are a personal brand, you inherently protect yourself from the competition because there can't be another Mike Michalowicz.

Right.

There can't be another Ian Cordell. You're a one of one.

Right.

So the power personal brands have are very hard to clone. No one else can say, well, I'm really the better Taylor Swift. No, there's only one. Right. You can be different, but you can't be better.

Right.

In traditional industry where I make a product, I make bottles, you— someone else will say I'm a better bottle maker, right? But you— no one can say I'm a better personal brand. You can only be different. So that's a really interesting thing. But so that's the opportunity in personal brands.

Yeah.

The downside of personal brands, or the risk we run, is that the perception is this one person. And how do you build a team that, that works fluidly, right? Um, it's a big question. And, and She's nailed it.

Yeah, absolutely. They've nailed it. All right. Number 5, smart collaborations and partnerships. Oh, here we go. We're going to talk, we're touching on this a little bit. Leverage strategic partnerships to expand your reach. Taylor has collaborated with high-profile artists like Ed Sheeran, Kendrick Lamar, and even brands like Diet Coke and Keds. Uh, these collaborators have expanded her audience and reinforced her brand.

Yeah. So smart. One of my favorite stories that runs in parallel is Air Jordan. Do you see that movie? No. Air, it's called.

Oh, I, yeah, I remember hearing about the creation of sneaker. Yes.

It's really not a sports movie as much as. How a celebrity or personal brand can team up with a product brand and both get elevated.

Right.

Fascinating story. And, and she's masterful at that. I think all businesses have to look at who else could benefit. I don't think we ask ourselves that question. So I have a relationship with my clients, but who else could benefit from these relationships that are established?

Yeah.

And that's where you find your partnership.

Is it risky?

Yeah. Well, yeah, yeah, there is a risk with it. If that partner is a bad actor, that partner misrepresents, or that partner takes advantage but doesn't contribute back, it can harm you.

Yeah.

You have to be selective. With our brand, our relationship with Relay, the banking platform, is the epitome to an extraordinary partnership.

Yeah.

What it means is there is a common consumer in mind that we're both serving. So it both elevates our business.

Right.

Excuse me, but above that, or foundationally below that, is there is a common value-based system. They really actively care about profit first.

Sure.

Delivering on it, what it means, protecting it, serving us. And we really care about that banking platform and how it really is in the best interest of our customers to use it because their fee structure, which is nonexistent, there is no fees.

Right.

We truly love them.

Yeah.

And I feel like they truly love us.

Yeah.

Those partnerships, they're out there. You have to be very selective of those. And those, those can do big things.

Yeah. Have you ever seen one build quickly or is this the kind of thing you got to really invest the time?

That's a great question. Yeah. I mean, I just, I think it's like any other relationship. Sometimes you fall, you meet someone like, I love you.

Right off the start. Right.

And it works.

Yeah.

That's far and few between. I think other ones we should go on some dates for a period of time and understand who the person is behind the person. Right. Relay was a couple years of of building trust and confidence and learning. And one great thing that you can do is we had customers, they had customers, and we looked for the common customers. We said, hey, let's just match up the databases. And there was a few. And then we said, let's call these people and say, why do you like both brands independently?

Wow.

And they would say, oh, we like them because they complement Profit First and they're just good people.

Right.

And they would say to them, well, we like Profit First because it's the best way to be profitable and works so seamlessly with your bank and they're good people.

Right.

And then we said, said, oh, okay, there's a commonality.

There it is. Are there avenues for business owners to, um, get into— I don't know, like small, small business organizations that help you find collaborators with your business? I mean, if, if you're thinking it's a necessary step in order to grow and cross-promote each other and things like that, I mean, how would you know where to look?

Or how would you know where— yeah, it's under our nose, but we don't ever think about it. You call your customers, your existing customers, and say say, who else do you work with? They already have the relationships, right? And then they say, well, I work with a lot of other people. I say, well, who do you really love? Um, and, and find out from them. Because what happens is when I find out, you know, I'm going back to the old days, but I had Olmec, which was a computer for me. And my, one of my favorite clients, his name was Larry O'Freel. I called Larry, I said, I'm your computer guy. I said, who else do you love that you work with? He said, oh, the trading desk company. They're just great. They build specialized desks for— he owned a hedge fund— for hedge funds. I said, oh, that's amazing. I said, would you introduce me to them? Because I'd love to learn more about them and collaborate with them. And I meet them and they're like, oh yeah, we love Larry. And I'm like, I love Larry. So you have a common bond in that one customer. And they say, oh, we have other guys like Larry too. And I didn't say, oh, can you refer me?

Can you give me business?

And somebody said, wow, let's see what happens here. And we started collaborating and working together, usually in the common interest of Larry. We started installing the computers in a different way, the cabling in a better way at Larry's, so that when the trading desk company was changing the trading desk— and this is literally, literally a physical desk that they expand and change— okay, when they were making changes, uh, the how we set up the wiring, it was a more stable business environment. The, the vendors installing the tables had less problems, and they loved it. So then naturally they called us one day and said, Would you want another Larry? Because they don't like their computer guy and we love working with you. We wanna recommend you. Yeah.

And I introduced them to other Larrys and said, I think this is my favorite of your stories so far, Mike. I love the, I love the synergy.

Yeah, it's very synergistic. It's, it's practical. It's focused on the customer. So that's the ultimate irony. We're told most cases, go to your customer and ask for referral. So imagine this, Amy. I'm an electrician, I come to your house, I fix your electrical, whatever. I say, how's my work? You would likely say you did a good job. Now, what people don't know is the customer almost feels obligated to say that because of social grace. If I just finished my electrical work at your house, Amy, and it was effed up, there was a problem, the switches are flickering, it's not perfect. And I said, how did I do? You probably still say you did a good job. Yeah, you did a good job. Because the reason we say is we don't want conflict, right? Then the second I leave, you're like, Chris, this guy sucked, right? The truth happens behind the scenes, but not to my face.

Right.

So the first thing is we get lied to by our customers. The second thing is, though, most people are told to ask for referrals. So I come to you and say, how was the job? You say good. So I'm like, oh, she liked my flickering lights.

Right.

I then know I'm programmed to say, hey, Amy, would you please introduce me to some of your other family friends in the neighborhood, or perhaps even family that could use electrical services? It's called asking for the referral. Now think about it. In your mind, right, this guy kind of sucked. Even if he was great, it doesn't matter. You're also then saying, "I just paid you a lot of money, Mike, and you're saying that's not enough? You need more from me?" Right. There's an F you. Yeah. But social grace says, "Uh, let me think about it. I'm sure I have a friend. I'll get back to you." And then we just try to avoid.

Right.

The reality is it's very offensive to ask for referrals, and yet that's the way we're programmed to run our businesses. That's a grand mistake. It drives me nuts. I see so many experts online saying ask for referrals, here's a referral program, compensate your clients for referral. It is not the most effective way. It can work in certain circumstances. The most effective way is not to dilute the customer by saying, you know, I can't pay attention to you, you refer me here. It's actually to concentrate on the customer. So instead of saying, how was the work I did? I'd say, Amy, I hope I did a job that you're, uh, joyful with. I want to always ensure that I serve you even better. Would you be willing to introduce me to any other contractors you work with that I can talk with them and say, next time I'm installing electrical or repairing electrical, if I know where the studs are in your wall from your cabinetry or carpenter person, right, um, that I don't interfere with their work and maybe even complement it?

Yeah.

Would you be willing to do that? And in the right context, the customer will say yeah, because I'm not going elsewhere. Now I'm saying, Amy, I want to serve you better, right? But what happens behind the scenes, I'm building this relationship with your carpenter, or your plumber. And now I can build those relationships and say, listen, I'm installing electrical at Amy's. I know you do work there. What can I do to make sure that you shine in Amy's eyes too?

Oh, that's great.

And now those vendors are like, this is amazing. This guy cares for me. You're caring for me. Let me introduce you to other people I know. And that naturally comes about. That is the— I call it the vendor well.

Yeah.

When I wrote the Pumpkin Plan, I dedicated it to this concept. It is the most underutilized, most TNT explosive growth method because it's natural, it's authentic, it's real.

Yeah. Oh, I love it, Mike. That's so great. So great. Okay, next one. Mastering public relations and media. Control your narrative and handle public relations with grace. Um, so after a very public feud with Kanye West, Taylor managed her image by addressing the issue directly through her music, Look What You Made Me Do, and reinventing herself. Then this approach allowed her to control the narrative and turn a challenge into an opportunity. Yeah, so yeah, I guess that's really important for business owners too, especially small business owners. Then you get Google reviews, and I love it when I see owners of businesses, businesses address the complaints that people put up onto platforms like— yeah, like Google.

So we have— I love— that's a great point, Amy. What we have to realize is it's human nature just to rubberneck, to stare at the train wreck, right? And and also at the same time complain that other people do it. So next time you're on a highway and traffic stopped and everyone's looking at the car accident, watch your own behavior. At least I'll talk to my own. I was like, why is everyone slowing down? It's just a car accident. We hope everyone's okay. Move forward. Why are they rubbernecking? And as the accident comes by, here goes my arm.

Oh my God. There goes your neck.

Oh my God. That wheel. Yeah. We accuse others of what we do. We do. So when it comes to the PR, defending or accusing others is inevitably, I think, one of the worst things we can do because it aggravates a problem. So someone says, Mike, your business sucks. I'm like, oh, you suck. You know, I don't suck, you suck.

Right.

Conflict isn't there. I also know from this rubbernecking that whatever is said ill of me is that is going to get the most attention, right? So when I have Pump First has like, I think, 8 or 9,000 reviews online. So say it has 8,000 reviews.

Yeah.

You go to it. When you go through, you're not going to read 8,000 reviews. You're not going to look at the car speeding by. You're going to look at the one that crashed. So I know you're going to go to the 1-star, right? And what you're doing there is people are not saying that 1-star is accurate. They're saying, how is Mike managing this? Is he ignoring it? And sometimes it's appropriate to ignore it. Someone that's off their rocker, right?

Right.

Other times, is he responding defensively? Well, now that gives me the icks. Mike is a— or they respond professionally. You ever go to a restaurant where it has like, you know, has, uh, 75-star reviews and, and one 1-star review? I, I read the 1-star, right? You know, horrible service, nasty staff, they, they spit in my food, right? And then I see the owner's response saying, uh, we, we did have you here on such and such day, uh, we tried to move you to a new space as you may recall, but you were unwilling to move to this other table because you demand demanded to sit at the table in the entryway where it's most noisy. Um, you did have a member in your party that was coughing and they coughed on your food and you returned the food because they coughed on it.

Yeah.

Um, now you start kind of bullet-pointing what actually happened and it's like, wow, this place is truthful and integral and they got a Lulu in their hand. And that 1 star now flips to becoming actually your real 5-star.

Exactly. Yeah.

Taylor Swift is great at it. She's controlling the narrative. But she's also not feeling the fire. You don't have to fight when there's no fight to be fought, right? And I think that is just as powerful as a discipline, is there is an appropriate time often where no response is the best response. Yeah, and she and her team have that navigated very well.

All right, number 7: diversification and multiple revenue streams. Don't rely on just one income source, diversify. So in addition to her music, Taylor Swift, Swift has made millions through tours, merchandise, endorsements, and more recently movie and streaming rights, including the Eras Tour film. She's constantly exploring new ways to monetize her brand.

Yeah, so my— I have a yes and no to this one.

Okay, this is interesting.

Yeah, here's why Taylor Swift as a model does not serve small businesses. Taylor Swift can diversify because she makes hundreds of millions, if not billions of dollars. And so we're like, oh, look at Taylor Swift, she does all these different things, therefore because she does so many different things she made a billion dollars. No, you know how Taylor Swift started? We just talked about she started off with one hit song. She didn't have that hit song and come out with, check out my calendar and check out these magazine articles about me and, and buy my sweatshirts and enjoy my YouTube channel, right? Or my paid Patreon channel. She came out with one hit song and she got really good at the song components and then she expanded from there. I think small businesses, the mistake they make is they say, I gotta diversify when I start, I gotta do all these different things, and it dilutes your ability of being excellent at anything, right? Taylor Swift nailed songwriting, narrative telling through her songs, and catchy songs. Freaking nailed it. And that builds this platform. She has an anchor product, anchor tenant, if you will, and allows you to do all these things around it. What we're doing here is our anchor tenant is the books. Profit First being the most notable one, but All In probably my best written one. Clockwork Made, the one I'm most proud of. I mean, they all are. Are the best of what I was able to do at that time.

Right.

We have other things we do, but without us pushing and caring for the anchor tenant, everything else will start to collapse. If Taylor Swift says, you know what, screw songwriting now, I'm just gonna go full-time actress, she actually may pull it off because she has so much effort and momentum she's built in that anchor tenant. But we small businesses, we're not the size yet. So So I encourage people, master that anchor tenant, build such a strong reputation on it. And then maybe once you're doing $50 million in revenue, then maybe add that next song of yours or diversify a little bit beyond the anchor tenant. So I think that's where we get distracted. And I'm picking on Taylor Swift here. It could be Amazon or any of these companies we look at and say, look, you know, I want to be the next Amazon. Amazon started off by just selling books. I think we forget that. Yeah. And he got really good at selling books and crushed it. And once they did that, then he said, well, let me add more products.

Right.

They didn't start by doing all these different products.

Smart. Okay. Thanks for that, Mike. All right. Next one. Understanding your customer data. Customer. Customer.

I like it. You sound like you're from Worcester, Massachusetts. You gotta understand your customer.

Yeah. Leverage data to make informed decisions. So Taylor Swift has used data analytics to understand where her fans are located and which songs resonate most, allowing her to plan successful successful tours and merchandise— merchandise— merchandise. Yeah, yeah, I'm New York and Boston.

Yeah, I love it.

Awesome merchandise launches. So smart. I didn't even think of that, to, to get more specific about what you're offering where, uh, while you're traveling with your, with your stuff. Using data to figure that stuff out.

Data is important. I think it's underutilized by most entrepreneurs. We say we trust our gut, our gut knows all, and the reality is It rarely does. Here's, here's the danger. When you start your business, you don't have any data. So the only thing you got is your gut, and your gut will guide you on self-preservation, self-awareness, pretty darn well. The thing is, our business is a separate entity. So I, I don't know if, if, uh, I really understood how the gut works until recent years. There are inputs into our brain from sight, smell, touch, our senses. Those come together and then our brain calculates and the hippocampus and the reticular formation, which has the reticular activating system, which some people know about, and the prefrontal cortex, they all do their things and light up and it gives us this near-instant feeling. And it usually comes across as emotion. It's the best communication, like avoid, run, love, appreciate. So these quick emotions come up and that's what we call our gut. So you can be walking down a dark alley and you're like, ooh, oh, I got shivers. That walk back outta that dark alley. That's all these inputs saying, based upon my history and experience, bad thing, bad thing. It's like, it's like the caveman, bad thing. Go run, run. Bad thing. The thing is our business, we don't have sight. We don't have touch, smell in our business, but we act that way. So we say, you know, the business is, is trying to grow in this category. Ooh, I got the shivers. The bad, bad thing. And I run away. But we don't have the proper inputs. We have to look at the data that backs that. So intuition, when you're starting your business in the very beginning, is the only thing you can rely on. So you have to use it. But as you start collecting data, get real with that information. It will tell you a story that may be inconsistent with your intuition. And that's a beautiful thing. Challenge your intuition when it comes to your business insights. Don't go by your gut to run your business because that's a reactionary thing to biological emotion. Go by the data and see what the data says.

Okay.

And sometimes it'll be consistent. That's great. Other times it, it won't be.

How do you know as a young entrepreneur what data you're supposed to be tracking and what data you're not supposed to be tracking?

Yeah, yeah, there's a lot of it.

Is there a good resource for, for that, or—

Yeah, you start off with just tracking what you think is easiest to collect and may have value, and then you say, does this correlate to something?

Okay.

So you look for correlations. Back to Olmec, when I'm starting out, we noticed, we wanted to measure sales, like our sales volume and how much demand was coming down the road. So not how many sales we made today, but in the next 30 days, how much sales will we have? So we can start projecting and preparing. So we said, well, maybe it's the quotes we are sending out. The more quotes we're sending out will translate. And there was a correlation for sure. And we said, well, maybe it's how many customers are calling into us. So we started tracking customers calling in And, and, uh, that was hard to track, uh, because we did have a receptionist back in the day when you had a receptionist, was Wendy, and Wendy would just write down call from such and such customer. And one day she said, it's kind of hard to differentiate. Is this a customer calling? Is this a prospect calling? Is it, is it a friend that seems like a customer?

Yeah.

She goes, the only thing I can really track is just number of calls. We said, okay, track it. We then started realizing, oh my gosh, there's a correlation that when we have high call volume for a week, 3 or 4 weeks later, there's actually a higher sales volume.

Okay.

So there's, there's some loose correlation, right? Then this was back in 2000. What was it? '90s? I can't remember. '98, '99. There were— it wasn't 2000 before that, so it was '98, '99 or something. There was a— something happened, some struggle. Oh no, no, you know what it was? It was the, um, the attacks on the World Trade Center.

Oh, okay.

Was that 2000?

2001. 2000.

Okay. Or 2001 or 2000?

2000, right?

Whatever. It was around 2000.

It was 2000. Yeah. Yeah.

It was the World Trade Center attacks. We were tracking these calls. And then all of a sudden the next morning, even that day, there's no more calls coming in. And Wendy's reports, she goes, calls have dropped by 90%. And we're like, we may have a 90% drop in sales. We started that week saying reduce hours. We have to take decisive action because we're too small to afford this. And sure enough, 4 weeks later, all the business had dried up. And just stopped. We're like, we caught this in advance because we're collecting that data. My gut, interestingly, was saying something radically different, saying this is a time that people are gonna be more interested in security because we were moving, we were in security and technology.

Sure.

This is just gonna be an uptick. Uh, my gut is, is people are gonna have to rebuild quickly and change and enhance and improve. And that, you know, outside threats are real now. This is gonna be a unfortunate boom for business, but a boom for business. Right. But the data showed something different, and sure enough, the data was right.

Thank you for that, Mike. Yeah. Staying resilient in the face of adversity. Oh, and she's had adversity.

She's had adversity. And it's so easy for me to glom over, like, what adversity? She's a multi— you have no problems, right? That's not—

you're judged so harshly by so many. Michalowicz.

You're judged harshly by Michalowicz. Yes, Eric, what problem can you have?

Yeah.

You know what she She's a human.

Yeah.

She's every effing problem every other one of us has.

That's right. On top of the big business problems.

Yeah. The other, and every eyeball on the planet staring at you. Yeah. So she has just as many problems. She has money that can do one of two things. It can help amplify a solution, get you there much quicker. It can also amplify problems. And we've seen major celebrities that have come into tons of money that have just blown that money, estates that just vanished.

Right.

What happened to that person?

Right, right, right.

Right. So let's realize money is an extraordinary powerful tool, but it can be used in many ways.

For good or for bad.

Good or bad.

Good or bad. Yeah.

What I admire about her is she seems to be very public, at least about portions of her challenges and resilience. And at least for me, and maybe I'm wrong, I'd love for our listeners to give us feedback, is she seems to be one of the first celebrity brands I can think of of that there isn't this almost pining, this hope for her collapse. You know, we build them up.

Yeah. We knock them down.

We take them down. Yeah. We love that. Like, oh, alcoholic. So-and-so knew it.

Knew it.

Having an affair. Knew it.

Yep.

I, I don't know if, if we're waiting for that with her.

Yeah.

But maybe, maybe we are. Maybe I'm blind.

Does feel like in general, even me as a fan, not fan, I'm no Swiftie. I don't own any of her music or anything, but I I just, I do appreciate her and I think she's incredibly resourceful and I think she's incredibly strong. And I do agree that, you know, she's reemerged stronger after her setbacks. She's reinvented herself and come over. So I do find like people like me rooting for her.

Yeah. It's funny. You're rooting for one of the most successful person in the US at least, or one of the top, like you're still rooting for her. She's been able to position herself that way. We root for her. Now listen, there is hatred. There's probably someone listening right now going, the Mike's an animal. For saying any kind words. She's the— she's—

why are they even doing—

she's the devil persona, right? There is a hate group out there, and, and, and maybe they want her collapse. It just doesn't feel like the general consensus. But when someone does collapse, uh, who's that? Um, she was married to Ben Affleck.

JLo.

JLo. I, I don't follow JLo, so I'm not very much associated with it, But you can't leave a food store without seeing like all these magazine headlines and the J.Lo collapse and her ignorance. But there also feels when I'm sitting there and the few people I hear around me pointing at the magazine like, I knew J.Lo was going to collapse. Yeah, she, she had it coming. Like, who was she? I still feel that around Taylor Swift. So this is— it maybe will happen, but she seems to be navigating the very difficult build them and collapse, take them down.

Right. And even if she were to collapse, I think she's the kind of person who would reemerge down the road and with more resilience. That's really the key quality to have, that resilience, especially as small business owners, entrepreneurs.

I think one thing, and maybe she's not doing this well, but I don't think you can do it, is I think we humans associate labels to a person And then we either have an affinity or a dislike or hatred, whatever, for that label. So if you're a Taylor Swift fan, that means you're this type of person, right? So it's all labeled, right? And I hate those labels, and therefore I wish your collapse and Taylor Swift— I wish the worst upon you, right? If, if you don't like Taylor Swift, that means you're a certain person, and it's the same label sign. Assignment. I've heard these things with Swifties going after people with such vitriol.

Yeah.

And what I think is it's a label assignment, disassociation for that label, and then going after it, um, and attacking because you're not me. And shame on everyone.

Sure.

Who behaves that way, including myself. Like, I think it's a natural human behavior. I don't think it's an acceptable one. Right. We have to be a little more intellectual than that.

Last one, fostering a dedicated community. Community. Build a community that champions your brand. Taylor's fan base is not just a group of passive listeners. Her fans advocate for her, create social media trends, and buy her products. They're an integral part of her success. So build a strong community around your brand.

Well, this goes on to what we were just talking about. Yeah, she's definitely done that, but some of the fans go too far. And so the question I have, without really even having a pondered answer for myself, is Does Taylor Swift or the Taylor Swift brand have a responsibility to temper that? Because if Taylor Swift went to those extreme case Swifties that are going after others, threatening others, and says, I don't stand for that. I don't stand for violence. I don't— I'm not promoting that. And if that's who you are, I don't want you part of my tribe.

Right.

I don't know if Taylor's ever done that. And that's courageous because that group will say, now you're abandoning us.

Right?

And then they'll re— yeah, they'll turn and go after you. If Taylor Swift hasn't done that, does that brand have the courage— is that the right word— or have the responsibility— is that the right word? I don't know what it is— to come back and say, this is not who I am, and if you think you're representing me, shame on you, because you're not, right? Um, I'd be really curious about that. So you can build a dedicated community, but I think we need to keep on driving the values were about. I'll give you a personal example. Profit First being the most popular thing I do, um, there are some people who have taken Profit First too far. So here's what Profit First is not. It's not about greed and getting rich. Um, the outcome may be wealth, and I'm definitely an advocate for that, but people hear the words profit first and they say, oh, all this guy cares about is profit first. That's not it. Dave Ramsey effed this up on his radio show. Someone calls in and said, do you know about profit first? He's like, no, but I'll tell you this, is I'm people first. Dave Ramsey, bull— you're not people first, you're profit first. Because if you have no profit, you can't care for your people, right? So, right. But it also points to his and other people's ignorance of what profit first is about, right? Profit first is about taking the financial welfare of an organization with such care and focus that we can provide great jobs and great opportunities for other people. It's the greatest way to be a provider. It's putting your oxygen mask on first.

Right.

But there are people that have taken profit first and said it's all about accumulation. It's all about maximizing. It's about cutting everything out except what makes me money. And therefore I am representative of what profit first truly is about. It's like, no, no, no, no. No, I understand you're using some of the systems and processes, but you're taking it to an area that is not about— it's not what I'm about.

Doesn't represent it.

And so I am actively on stage talking about that, and it's kind of— it sounds to the outsider like this guy's bipolar. I'm like, you have to be profitable, but shame on you thinking profit is at the cost of everything, right? Like, it's, it's the yin and yang. There really can be a balance of wealth accumulation, profitability, and caring, and community, and supporting, and everyone no one can come out ahead. Sure. So you have fans, a dedicated community, but some of them can take it too far. The question is, how do you navigate? And that's how I navigate. I'm, I'm vocal about it.

Right, right. And you need to be.

Yeah. But, but can you be? Because is Taylor Swift to the point where she can't be?

Yeah.

Because it would cause a retaliation against her, possibly. I don't know.

I don't know. I don't know. Well, thank you for this, Mike.

This has been good.

It has been interesting.

Oh shoot, we gotta wrap things up. This is a long episode. Oh gosh, let me just check the clock real quick. I know we're recording this live. Yes, I gotta run right now.

All right.

Okay.

Okay.

Great episode. This was Amy Cartelli, Mike Michalowicz. Thanks for listening to Entrepreneurship Simplified. We'll see you next week.

Bye. Bye.