Mike Michalowicz (03:05):
And this was about 15 years ago when it happened. And I committed to investigating what makes an entrepreneur truly successful because I wanted to be truly successful. And when I started writing this, I’m like, “Oh my gosh, I’m writing more than just for myself, I’m writing stuff that maybe will serve others.” That’s how it became books. And now I just thirst to learn entrepreneurship. I do own directly two companies, a partner or a shareholder in about five other businesses, and it’s a passion of mine. My goal, my commitment is to simplify the entrepreneurial journey for anyone that I can be of service to. And I try to do it through my books.

Robert Leonard (03:43):
Do you take your concepts from all your books and apply them to the businesses that you own and invest in?

Mike Michalowicz (03:49):
I do. So we’re the Guinea pig. And some of my colleagues here are like, “Geez, Mike, do we have to do this?” Like, “Yes.” So for example, Clockwork was a book I released on business efficiency three or four years ago. And I was studying what triggers efficiency and there’s this concept I call the fortification. If you can take out the owner for four weeks, the business has to run itself. You can’t cram and scramble, you can’t punch before… [inaudible 00:04:15] all the stuff on your list before you leave and then recover four weeks later, too much happens in that period of time. So I started taking these fortifications as a test as I’m writing the book, my colleagues here started to operate the business more and more on their own without me.

Mike Michalowicz (04:30):
And the president of our company, [Kelsey 00:04:32], she came to me and said, “You know what? We all need to take fortifications so that we’re not depending on anybody.” So that became something we’ve been testing over the last three years. I’m revising the book now to talk about the importance of all employees taking big block breaks from the business, not just for their own benefit, but for the benefit of the business. The other thing that’s funny is with these books, it’s like the ultimate accountability mechanism. So like when I wrote Profit First, I live by Profit First, I have to. If I teach it but don’t do it, people are going to I think you’re a charlatan. So all the books I write I live by and they keep me accountable to it, my readership does.

Robert Leonard (05:10):
I actually love Profit First as well. My background is in accounting and finance, so that book was really right up my alley, I really liked it. My little brother just started his own landscaping business and-

Mike Michalowicz (05:19):
Oh, awesome.

Robert Leonard (05:19):
… I gave it to him. I said, “Listen, before you start doing any of your accounting…” He started diving into QuickBooks and stuff, and I bought him a copy of Profit First and gave it to him, and made him read it before he started doing anything related to that.

Mike Michalowicz (05:29):
I actually just spoke at a landscaper conference, a virtual one because of COVID. But it’s funny, that business community is just like any other business community. You’re trying to grow as fast as possible, but the burden of the expenses that come behind that equipment, breakdowns, staff turnover, it’s a freaking hard industry. But what we found is when people start thinking of profit first, it forces them to find ways to stretch out the value of their equipment. One guy, I love this, he said, “After I implemented profit first,” he noticed that they were replacing manual tools like wheelbarrows, gloves, equipment at a super high rate, that the workers were like, they’d come up in their [MOLST 00:06:08] truck and they’ll throw the wheelbarrow off it and it would be snapping a handle. He said that it was expensive.

Mike Michalowicz (06:13):
What he did was he had every worker write their name on the item they used and said, “This is now your gear.” He said, the second they put their name on it, I put Mike on a wheelbarrow, you’re not throwing that thing off anymore because that’s my wheelbarrow. So now they’re prudent. He says, the longevity has quadrupled. The guys are caring for their stuff, just with the markers. The cost was a 50 cent marker and he saved thousands and thousands of dollars over the years, which all goes to the bottom line.

Robert Leonard (06:42):
What fascinates me is that there are so many opportunities in these industries, like the trades typically, where there’s so much opportunity for what we study in business and psychology that these guys are great at the trade. Like my brother, just as an example. And my dad, actually, my dad’s a mechanic as well. They’re great at being a mechanic or a landscaper, but they’re not great at being business people. And so if you can just do this psychological trick that you can just implement and you learn that in business books. If you could just apply that to a business like that, you can crush it.

Mike Michalowicz (07:11):
And that’s the idea. So you studied finances. We’re told these crazy things like, “Oh, you got to do a butterfly straddle of the stock investment and stuff, and you got to hedge your moves, and you got to know the PNL and tie it to the cash flow statement.” It’s really easy to bring in complexity to business. It’s really easy to add more and more stuff and think that’s the path to success. The hard part is actually boiling it down to the essential elements. And when you do these few things that have a big impact, you don’t have to worry about it. I’m proud to admit, I look at my P&L maybe twice a year when my accountant says, “Let’s review, so we can go into the detail.” Every day, I’m using the profit first system. And of all his clients, and he’s got a few hundred clients, I’m hands down the most profitable he has by a long shot.

Mike Michalowicz (07:55):
And he’s like, “Mike, I talk to you the least about the financials yet you’re the best at it.” I’m like, “Because the financials in the traditional sense really aren’t of service, they’re more of a distraction for a guy like me.” I know a few things, I’m not a mechanic, I know how to market. So I’m like, “I’m good at that, and I know the numbers are important, but I’m not going to read these financial statements.” And I just found, boil it down to the essence of what works. And I think that’s true for all entrepreneurs. You don’t have to do all the complexity, just do the essential components that have a big impact, you got to find out and know what they are. But when you do those few things that have a big impact, you can get to the essence of what you’re capable of and your business will flourish.

Robert Leonard (08:31):
We’re going to spend a big chunk of today’s episode in conversation talking about your new book. But before we do that, there’s a couple of concepts in one or two that we talked about last time that I think is really important. And so I want to talk about them again. And one comes from your book, The Toilet Paper Entrepreneur, where you wrote, “Never started a company before, struggling with little or no cash, have no experience, no baseline to judge your progress against, that’s good. You actually have a shot at making this work.” A lot of people think that no money or experience is actually a negative thing, but you’re saying the opposite. Why does having no money or experience give someone a shot at their business actually working?

Mike Michalowicz (09:14):
Because necessity surely is the mother of invention. There was a study done by a guy named Northcote Parkinson, this is from the 1950s. He studied the use of resources and notice an interesting phenomenon. “The more available resources, the more we consume it.” His studies were mostly around time and he noticed that the more time I’m given to do something the longer it takes us to do it. And the less time we’re given to do something, the more efficient we become because now time is pressuring us. But this isn’t true only for time, it’s true for money and knowledge. So the more money you have flung into your business, it’s almost uncanny, but we spend so much more. So the lack of money forces innovative thought; forces us to think outside the box. And how do I get the same result without cash? And you find these remarkable solutions.

Mike Michalowicz (10:02):
Without experience, you can’t fall into the complacency of doing what the industry does, you start breaking the rules. And it’s the rule breakers who inevitably redefine the industry, they’re the biggest winners. So the lack of those things makes you the innovator. You actually are set, I believe for the most potential for success because you’re not going to become complacent.

Robert Leonard (10:23):
Have you ever read the book, Power of Broke?

Mike Michalowicz (10:26):
No, I have not.

Robert Leonard (10:28):
Power of Broke for anybody listening, and you Mike, who hasn’t read it, I highly recommend you do. It’s from Daymond John, the shark from Shark Tank, such a great book. And it talks about the same idea of the Power of Broke and having nothing and how that’s actually a power for you. But there’s a lot of people that talk about this. [Gary V 00:10:44] talks about how if you’re actually born into a wealthy family, your chances of actually building something successful is probably… Yeah, you have the money and the resources, but you’re not going to have the grit and you’re going to rely on the money to actually build the thing. Whereas you have to get creative if you don’t have the money.

Mike Michalowicz (11:00):
There’s another book I’ve been reading called the comfort crisis. And the whole concept of this book is as society evolves, everything’s around comfort. When you used to drive a car, there was no air conditioning. If you wanted cool, you roll down the windows and you drove faster for the breeze. Heated seats, are you kidding me? But today that’s the standard. These things are standard. Air conditioning and heated, all standard. And they’re talking about the effect on our body, that our body is becoming less capable of protecting and serving itself. I was like, “Wow, this translates not just to our health, is our business too.” The more comfortable it is, the softer our business becomes, and the less strength it has. The same point.

Robert Leonard (11:37):
As soon as this interview is over, I’m going to go on Amazon and I’m going to buy that book. Because I’ve literally been thinking to myself over the last couple of weeks, I’m getting too comfortable, I’m getting too complacent. And I’m not in that mindset of where I’m “broke” anymore. I don’t have that power of broke anymore, and I’m noticing it in myself. And so I’m going to go read that book.

Mike Michalowicz (11:56):
It’s some interesting discoveries. So it turned me on to some health things too. There’s another book called Wim Hof, the author’s name, but it’s called the Wim Hof method. And it’s about exposure to things that challenge your body, but how the body responds by strengthening it.

Robert Leonard (12:11):
Is he the one that does the extremely cold temperatures?

Mike Michalowicz (12:15):
Yeah. They call him, “The Iceman,” yeah. So the cold temperature. So I’ve been trying different breathing techniques, cold exposure. But one example is just our own health and biology. Exposure to germs makes your body stronger in defending itself against germs. And one argument that I’ve heard in this book called The Crisis 2, is as we spray everything, we wipe things down to kill COVID, we’re killing everything. It potentially weakens the immune system. Same thing with our business. The more money, you come from a wealthy family, it weakens that strength system to defend yourself. And when the tough times come you fall over and you’re like, “I need money, daddy.” And it’s not a good way to run your business.

Robert Leonard (12:57):
Have you come to any conclusions or revelations in terms of how somebody in that situation, whether they’re super wealthy or if they’ve just had a little bit of success already, can combat that? What can we do to get out of that rot?

Mike Michalowicz (13:12):
Yeah. So I think when the burns come, we need to earn that burn. What I mean by this is, all of us are going to go through challenging times. If we go to wherever that crutch or resource is and that resource supports us again, we won’t get the burn. All of us learn through the burn, which you must earn. There you go, that’s rhyming. The most impactful point in my life was when I started that angel investing company and I was totally full of myself. I was like, “I know everything, I’m so freaking smart.” And I lost everything. I had to come to my family and tell them we’re losing your house, we lost it 30 days later. We had to liquidate our remaining assets just to cover some core debt and start a new, it was horrible. And I was at that point where I was going to… I was thinking, I ask friends, try to borrow money, but I didn’t.

Mike Michalowicz (13:58):
And I had to start afresh and rebuild myself up. And every micro achievement I had from that point forward and macro achievement, I look back upon and I’m like, “Wow.” I started building confidence in myself. “I did this for me and for my family and for us, I was able to do it,” actually built confidence. I think if a savior came in and said, “Don’t worry, here’s your savior.” I’d be extraordinarily grateful in that moment by I wouldn’t have learned to help myself, and I’d faced that problem again. You remember that song, the country song, “When you’re going through hell, keep going?” When you’re going through hell, keep going because it builds this muscle and those problems will present themselves, but now your corporate or entrepreneurial immune system’s there. I’ve had problems come my way and I’ve been able to adjust faster, more confidently because of what I’ve been through in the past. It’s ironic, those horrible times in our lives, I think in many cases, we actually cherish in retrospect for how it defines us and strengthens us.

Robert Leonard (14:54):
What about on the opposite side? What if you’re actually doing pretty well? You’re comfortable you’re actually making a little bit of money, things are going well. So you feel like you’ve lost that edge, you’ve lost that grit. How do you get that back? Is there a way to maybe simulate being broke? Or what can we do to actually get that edge back?

Mike Michalowicz (15:12):
So I think we need to set an unaccomplishable goal. So I’m so blessed, and literally every morning I wake up with gratitude for this, to be experiencing the level of success. I’ve defined it in some regards, the impact I’m having on the community, financial comfort it’s brought to my family. Something even more valuable, the time comfort, the flexibility I have. I got to do what gives me joy. I’m a spokesperson for the work I do now, so what we’re doing today is actually my primary job now, write books and talk about books. I love it. But I also realize at this level, I could just say, “Oh, let’s just coast now.” So I set an unaccomplishable goal. It’s my life’s purpose. It’s actually on the wall here. Right there, it says, “Eradicate entrepreneurial poverty,” on the wall. And I look at that every day.

Mike Michalowicz (15:59):
And it’s my reminder that that’s why I have deemed myself to be on this planet. I got to satisfy that goal. And there are 300 million small businesses that are struggling on this planet right now. People went in with their business having dreams of being financially free, of having the personal freedom to do what they want when they want, but they can’t because they’re now beholden to the business they started to serve that dream, it really is a nightmare for them. And I think I have some formulas to help people fix that. I got to solve that. I haven’t even scratched the surface of that. So every morning I wake up with actually growing vigor. I’m like, “There’s one less day in my life. As of yesterday, there’s one less day I’m going to live now, I got to hustle.” So I actually am growing energy around serving this purpose.

Mike Michalowicz (16:44):
And I think that’s how you keep that grit, have something massive as a purpose. However you define what massive is, I’m not saying you have to serve millions of people. I met one guy who said his life’s purpose… His wife had passed away of a horrible disease early on, and he was a single father. And he said, “My life’s purpose is to spend time with my two daughters now because they don’t have a mother anymore.” And he’s like, “I’m embarrassed, that’s not a big purpose.” And I’m like, “Are you kidding me? That’s probably the biggest purpose on this planet, to be of service to our own children, do that.” And he found that dinner time was the most important time, he’s able to spend an hour or more with his daughters, enjoying and celebrating the day. And then he came back to…

Mike Michalowicz (17:24):
And remember this guy, I can’t remember his name anymore. But I ran into him a year or two later, he said, “I discovered for a single parent, dinner is what matters most. I started a business, like a blue apron for single parents. So it’s not just about the meal, it’s about the celebration of time together.” I’m like, “Wow.” So purpose, it doesn’t have to be the measurable size, it’s what you feel internally. And for him it’s suspending time with his two children, that is a massive purpose. And now he’s fulfilling it at another new level. I think we need set goals like that.

Robert Leonard (17:55):
Both of those goals are awesome. As a single dad myself, I can relate to his a lot. So that’s great. One of the other concepts you’ve talked about in your books is this idea around a business plan. And you talk about how a business plan is a waste of time. Why is that? And if we don’t need a business plan, what are the three sheets of paper we need to successfully launch, manage and grow a business?

Mike Michalowicz (18:20):
Yeah, so that hearkens back to Toilet Paper Entrepreneur, and subsequently, I’ve modified the three-sheet plan. The reason business plans typically fail is because they have arbitrary mythical elements, and we think they’re true. One of them is, “I project my business will do… first year, we’ll do a million. Within three years, we’re doing a billion dollars.” And these, by the way, are pessimistic, this is the worst-case scenario. It’s total bullsh**. We cannot predict the future of our business. Listen, if you could predict the future of business, why not invest in the stock market? If you can predict what’s happening tomorrow, you will be a billionaire. So there isn’t predictability. I think it was Colin Powell who said, “You can plan for a battle until the end of the day, but the second that first bullet flies, all things are off the table.”

Mike Michalowicz (19:10):
There’s too much variability, there are too many moving parts. So we can have goals and vision, but you can’t plan each strategic step. That’s why I think business plans are rooted to fail and they’re a mistake. In fact, I can prove it, go to any business that has a business plan, and look at the shelf. It is sitting there, it’s covered with dust, they’re not accessing it because it simply was a hope and a plan of trying to see the future, but we can’t see the future. I think what we can do, the equivalent of the three sheets is set a vision document. And the vision document is where we intend or want to be, but don’t articulate the path to get there. In fact, instead, use a technique called tacking. I wrote about that in the Toilet Paper Entrepreneur. Tacking is a strategy used by sailors.

Mike Michalowicz (19:53):
You have a boat, a sailboat. You set an X on the map where you want to go to, that island out there in the horizon. And you don’t go at it in a direct line, in fact, you use a zigzag pattern. Because you go as best you can toward the island, but you need to capture the wind, you need to avoid obstacles like other boats, stand bars, catch the momentum, the current of the ties that’s shifting, and you use all this to move that direction. But after a certain period of time, maybe a few hundred yards, then you pull down a sail, you redirect it, lift it again to go in another direction. And now you’re zagging and you Zig and zag. And sure enough, you get to the island by zigging and zagging to get there. That’s what we need to implement in our business, we do not need planning. As of this recording, we’re not eight days away from quarter-end. Our team is meeting to do our zag.

Mike Michalowicz (20:42):
We had a very clear vision of what we wanted to do this year. And we zigged this quarter and it moved us in that direction, but things have come up, some opportunities, some struggles. And so we’re sitting down and we’re going to plan the next 90 days out. We can do short-term planning, I think that’s smart, what to do in the moment in the near future, we just can’t plan out the entire future. So set a vision and then zigzag your way there, attack.

Robert Leonard (21:05):
Whenever I think of a business plan or something along these lines of planning, I always think of that quote from Mike Tyson that says, “Everybody has a plan until they get punched in the mouth.” You could have a business plan and then something goes wrong or off-plan and now what?

Mike Michalowicz (21:19):
It is such a great quote. And can you imagine taking a punch from Mike Tyson? My face would explode.

Robert Leonard (21:24):
When I see some of these YouTubers that are starting to bach some of these guys, no, I can’t imagine.

Mike Michalowicz (21:30):
It’s insane. But it is such a good visual because it’s so visceral. That’s what it’s like in your business, it is like taking a Tyson punch, your face explodes. Hopefully, you’re conscious at some point after taking that hit, and that’s how we have to respond to our business. I think the greatest day for most entrepreneurs honestly, is the day before they start their business, with these grand hopes, we’re about to get into the ring with Tyson, we got this. And then you take that first punch and it’s like, “What the hell just happened?” The greatest day for many entrepreneurs is the first day, and that’s a shame because then they start losing faith in themselves. It becomes a grind. They become entrapped in their own business. We need to go back to that first day and to simply know that was a vision. Reset that vision, this is what our desire is. And then start doing the short-term planning and reactions to get them start zigging and zagging.

Robert Leonard (22:18):
Your newest book is called Get Different. And I want to talk about some of the important concepts from the book that I think people listening will get value from if they’re trying to start their own side hustle, small business, even a startup. And the first concept is really the overarching idea for the whole book. But you say that being better than your competitors isn’t enough because customers rarely care about better, different is actually better. Why isn’t being better, enough to win customers?

Mike Michalowicz (22:49):
Yeah. Because customers can’t even see better. Imagine you and I had directly competing businesses, maybe we both own a dry cleaner, for example. And I say, “You know what? We’re going to be the best dry cleaner in the neighborhood. I’m going to answer the phone in two rings. Any customer calls, we answer the phone within two rings so that they can get whatever information they need.” And you say, “We’re going to be the best dry cleaner, we’re going to answer the phone in one ring.” Unequivocably you are better, measurably you are better. But the question is, does the customer even notice? The answer is, no, they don’t. Of course, they don’t notice. We can look at our businesses right now, any of us, our own businesses and say, “We’ve got better credentials. We have better experience.” You can go through the list of all these ways that you’re better, but the customer only notices a few things. And the most common thing they’ll notice is the exception.

Mike Michalowicz (23:37):
How are you different? Here’s an example. My first company was in computer system setups, I was the computer guy. And I was better than my competition in so many ways. The credentials we’ve achieved, type of deployments network setups we did, all this great stuff. And there were dozens in my immediate area that were doing computer services and regionally hundreds, if not thousands. And we would compete, it was a slog every day. When you do a proposal, you’re competing against five or six other companies and so forth. And then one day, one computer company came into town and they kicked my ass to Sunday and did it with all our competition too. The company is called Geek Squad. And what Geek Squad did is they threw on these uniforms, these flood pants, tape around the glasses, and these little narrow ties.

Mike Michalowicz (24:21):
And they pulled up in their Volkswagen, Keystone cops vehicles, and customers went crazy over it. The reason they did was because it was different. Who doesn’t want a geek superhero fixing their computers? It was something that was different. Myself and all my contemporaries, we’d put on our suits, admittedly, a little bit too large shoulder pads sticking out, I looked like a scarecrow to be honest. Me and my contemporaries were scarecrows, and all of a sudden in comes a geek, and they dominated. Today, Geek Squad which sold to Best Buy, is at a $1 billion valuation with Best Buy. Massive and my company didn’t do that. And even though I could argue ours was better, and I still could argue, we were better technically, superior to Geek Squad, they were superior in being different. And different wins, because customers notice.

Robert Leonard (25:07):
I love that story. I think there’s also this piece of, everybody has a different opinion on what’s better. You have measurable things, the phone calls, if you pick up on one or two rings, obviously one is better. But there’s a lot of things like, some people might think a product is better just because it has a lower price or they might think it’s better because it has a higher price, there are a million different things that could define what is actually better for a product or service. And everybody is different.

Mike Michalowicz (25:34):
Correct. And the challenge is, we see the trees, we’re in the forest, it’s our own business. The customers are outside that, they see the forest. We have two radically different perspectives. It is so obvious to us why we’re better. The customer only knows about 0.01% about our business, and it’s that 0.01% that matters. So when I say be different, I’m not saying be different in everything. I’m actually saying, be the same in everything, just pick that one thing that’s undeniably noticeable. And often, actually, almost always, it’s in the marketing, because no one has experience with your business until they experience your business. So therefore the only experience they’ll have with your business prior to experiencing your business is the experience they have with marketing. Marketing is your front door for your business. If everyone’s front door is black, paint yours red because that’s the door that’ll appeal to you.

Mike Michalowicz (26:25):
In fact, in the book, I talk about that phenomenon. I say, “Imagine you walk into a room and there are 500 people in there and everyone’s wearing a gray suit. And one of those people is actually your soulmate, is your ultimate connection. How do you find them?” Well, you’d have to just go through people for hours and hours interviewing to find your soulmate. And honestly, you’d probably even give up. 20 hours into it, it’s like, “This is not worth it.” This is your soulmate and you’re talking about, it’s not worth it. Now imagine one person in that whole group is wearing red and I’m thinking, “Okay, your soulmate somewhere in here, start the interview process.”

Mike Michalowicz (26:56):
Well, there are 499 gray suits, there’s one red suit. Chances are you’re going to go to that red suit first, you’re not going to go randomly through it. They may not be your soulmate, but the fact that they distinguish themselves draws you in to identify and start there. That’s the power of differentiating yourselves. It makes it very easily sequentially in a person’s mind, where to get started. Start with the thing that stands out, it’s most likely what you want. Even if it’s not your soulmate, that’s where we’re going to get started.

Robert Leonard (27:24):
Why do most businesses’ marketing plans fail? Is it because they’re wearing that gray suit or they’re just painting their door black too?

Mike Michalowicz (27:32):
Yes, and planning implies commitment. That Colin Powell statement where he said, “Anyone can plan for a battle, but the second that first bullet flies, it’s outside the window.” A marketing plan is a commitment. And when it fails, most people say, “I guess it didn’t work for me.” Plans like, “I’m going to do Facebook ads. Everyone else is doing Facebook ads for 10 grand, I’m going to do 10 grand. I can barely scratch that dough together, but I’m all in on this.” And you do it, and it fails. It’s like, “Well, Facebook is not for me, and this was so costly. I’m never going to market again.” And we give up. The word plan implies commitment. And I think that’s a grand a mistake. I think we need marketing experiments. Experiments implies testing.

Mike Michalowicz (28:12):
There’s actually an expectation for failure. There’s an expectation and experience to learn from failure. So marketing experience is what we should do. These are very low costs, low dollar, low time investment efforts we make to see how our community response to something out here. And if we get a little traction and amplify and improve that, if it doesn’t work, great. Now we know that little thing that didn’t work, let’s try a new variant or a whole new thing altogether. So plans are risky because we think it’s an all in, or all out. Experiments are a learning process.

Robert Leonard (28:45):
One thing that I actually tend to talk about quite a bit is copying someone else who is doing what you want to do and is having success with it. I even hear some marketing influencers or gurus say that they go into the Facebook ad archives to look at what their competitors are running for ads. But I think you feel a little bit different about this strategy. So why does copying best practices from your competition almost guarantee your marketing will go unnoticed?

Mike Michalowicz (29:15):
Yeah. So here’s the big risk, is there is a process in every grain of humanity called habituation. It’s a process where our mind is wired to ignore stimuli that we already have quantified as irrelevant. So it’s white noise. Here’s a classic example with email marketing, for example. Maybe five, six years ago, I remember getting my first email that started off with the words, “Hey friend.” Hey friend? And when that happens, I never experienced that before, it’s like, “Oh, I have a friend, calling me a friend. This phrase is a very friendly thing to hear them say. They’re not even calling me by my first name, that’s how friendly they are.” And starting to read this and I’m like, “Oh, this is irrelevant, smarmy marketing. This is not for me.” In that one moment, habituation kicked in. My mind started to program. When the next email came in and started of with “Hey, friend.” I was like, “Last time, not relevant.”

Mike Michalowicz (30:09):
I skimmed it real quick. I was like, “No, not relevant.” It’s spammy marketing. The third hey friend, and ever since I’ve never looked at them, it’s the automatic delete button because I know it’s not relevant. That first person that did the hey friend, was a genius because they broke a mold, something that I didn’t expect. When something unexpected presents itself, how our mind is wired, we actually have to evaluate it. There’s a biological reason why we have to. The second person though, the copy cat-er is now starting to make this white noise, and by the third or fourth, it becomes ignorable when we see it’s not relevant. And you don’t see it just in marketing, you see in all aspects of life. I live outside New York city here and fire trucks, ambulances, police cars, they’ve changed our sirens.

Mike Michalowicz (30:55):
20 years ago it was a high, low whale. People were dying because of this. Literally not the people they were trying to rescue. People were walking across the street and not hearing a screeching ambulance coming humming down the block, and it was running people over. The reason was habituation. Our minds got used to this, in New York, you hear the high low, high low over and over again, it’s not relevant. We actually totally tune it out, even though it’s super loud. So what they did is they changed the sirens to squeaks, honks. They had to interrupt that pattern, so it jogs our senses into paying attention again. It’s a great lesson for marketing. If you’re doing the same high low as everybody else, you are just being ignored. If you are the first one to introduce something new, a new flavor to your community, something they haven’t experienced before, they have to pay attention and you’ll capture them. So I think the great lesson in what the competition’s doing, is when you see a pattern that other people are replicating, that’s the one pattern you should break.

Robert Leonard (31:51):
Other than just that tagline to not copy of, hey friend, what else made those emails spammy and how do we make sure that our marketing isn’t spammy like that?

Mike Michalowicz (32:02):
So there are actually three stages of effective marketing that I found in my research, and I put into Get Different. I call it the DAD framework, it’s an acronym DAD. And these three elements need to be checked off to be successful. First of all is, be different. I’ll lay out the three elements and I’ll give you an example of how I did it. So first be different, meaning break through the white noise. The second element, the A stands for attract, needs to speak to the customer. And I outlined that there are 15 different elements that speak to a customer and you can blend these together. A couple are — does it serve a need, or does it invoke a curiosity? Or does it simply entertain? Is there a reason to stay engaged with this? Does it speak my language? That’s a big one. Does it have my lingo? Do you get who I am? So we need to communicate that.

Mike Michalowicz (32:47):
A lot of these spammy ones say, “I’m on my private jet. You can have a private jet too.” I’m like, “First of all, I don’t give a sh** about a private jet. I don’t want a private jet and you’re bullsh**ting me, you don’t have a private jet. So don’t lie to me. You snuck onto a tarmac and took a picture there, pal.” There was an instant disconnect. These marketers often put themselves in such a superior position and put the recipient in such an inferior position. Now, if anything, it’ll maybe invoke jealousy or envy, that’s not going to evoke connection. So that was one of the elements. They fail to do what’s called the attractor factors. And then [lazy 00:33:20] marketing don’t have the last D, which is direct. Direct is a specific call to action, and this is the key, that is reasonable and safe.

Mike Michalowicz (33:28):
A lot of them are too big of an ask, or they’re too ambiguous or not clear. So tell the person what to do and be very clear, but it’s got to be safe. Like if you were looking to buy a car, you come into my car lot. And I’m like, “Hey, give me $100,000 and I’ll find you your dream car, Robert. Who are you? Forget it.” But if I say, “Give me your cell number so I can send you pictures of our inventory and we can find your dream car that way.” And you’re more likely to comply because it’s a reasonable ask. Now I’m moving you toward the final transaction, where you’ll get your dream car and I’ll get my commission.

Mike Michalowicz (33:59):
I’ll give an example on email just of how I did it. I noticed my contemporaries, other authors, when they do their email blasts, they’re sending them out and it has in black and white text. Which of course, it’s a black font and it’s a white background with some pictures maybe or something. I was like, “Okay, black and white is the common noise. What if I send out an invisible email?” So I took a white font, put it against a white background, I sent out an email blast. And in the very beginning in black text, it said, “This is the first-ever invisible ink email, click and drag below to highlight the message and reveal the message.” And people went wild over this. It was different. I don’t know if you’ve ever received an invisible ink email, probably not. So that has to invoke curiosity and interest. So we looked at, now it was attractive because it hearkens back to the past. As a kid, you maybe played passcodes and stuff with friends, use some Dakota ring, some visible ink thing. So it hearkens back to the past, it also invokes curiosity.

Mike Michalowicz (34:54):
What I was doing when I was trying to build my list for the Get Different, and I said, “Hey, you just experienced invisible ink email, that’s different marketing. I have 99 more ways that you can do unique marketing like this for free. Please sign up for my list if you want it.” So it was a reasonable ask and exchange. I was giving them something of value where they can replicate this and other strategies that they just experienced. And of all my emails actually, historically, that has been my most effective ever. So that’s an example of something that you can do that would change up what we regularly experience.

Robert Leonard (35:27):
Have you found people start to use the invisible ink emails?

Mike Michalowicz (35:31):
Here’s a shocking, no. And it’s a gimme. If your community hasn’t experienced it, send it out. But I know why they’re not doing it, because there’s a fear trigger. So this is very interesting. In my research around marketing, I looked at it as how our brain operates. And if we look back in the early days of humanity, I’m talking about the hunter, gatherer days when we were in tribes, our survival [was] dependent upon compliance with the tribe. So if you’re like, “Hey to the tribe, let’s go sun hunt a Wooly Mammoth.” And everyone’s like, “Well, I’m in.” I’m like, “No, let’s go for the saber tooth tiger man.” Now I’m out. The tribe is committed to something and there you are getting that. I am kicked out of the tribe because I’m not trustworthy, I’m going against the tribe. I’m out in the Tundra by myself now, and I’m not going to be accepted back in. I’m more of a risk. And if I’m out by myself, back in those days, that’s certain death, I am done. So back then being different, challenging the status quo meant certain death.

Mike Michalowicz (36:29):
And that is still wired into our reptilian brain. Societies move very quickly, but our brain is kind of chugging along at a very slow pace. So our brain is wired to not do different because that means we’ll be excluded and that means death. The other part though which is weird is when we do different, we also know that’s the only way to distinguish ourselves and stand out. So there’s this battling effect going on in our mind that we want to be noticed without being noticeable. When people discover this invisible ink, most people are like, “Oh, that’s cool, but I can’t do it in my community.” That’s the battle going on. That if I do something and I get rejected by my community, I’m dead. The truth is if you did replicate it, the worst outcome that could happen is that experiment fails and no one engages. The best case is people are like, “Wow, I’ve never seen this before.”

Mike Michalowicz (37:14):
When you do different, when you’re the first to do it, rarely do people replicate right away. That first, hey friend, that went out, I bet you, that person was doing it for a little while. And then all of a sudden it catches on like wildfire because other peoples now see it as safe and they start cloning the community. So do something first and I’m consistently shocked how long it takes for people to catch on. The invisible ink email will catch on one day, but I’m going to milk it for all it’s worth until it does catch on.

Robert Leonard (37:40):
In the same vein of this TV show of Undercover Billionaire, or there’s another show where they basically just take somebody who’s been successful in business, drop them in a random city with no money and tell them to figure it out. If you were in a situation like that, or you’re going to launch a brand new business today, you can’t use your brand, people know who you are, any of your books, anything like that. What would you use though from your knowledge that you know today that you didn’t know, maybe when you first started your first businesses, that you could use to increase the speed and the probability of the business you’re starting success?

Mike Michalowicz (38:14):
I absolutely would get my first client by offering whatever I’m doing for free because the first client is the hardest client to get. But the second client wants to know, who else are you working with? In fact, everyone wants to know, who else are you working with? That is the assurance they want in the quality of the product or service you offer. The first client is a marketing source. I think the mistake I see and I’d made with my first business was, I charged and I charged, and now I’m reducing my price. And I’m trying to get that first client and negotiating. If I simply went to a marquee client, the big name in the industry, and said, “Hey, I will provide my service to you at no cost in exchange for you being a referral source for me. Meaning I’m going to refer all my future opportunities to you as a referral source.”

Mike Michalowicz (39:01):
And if somebody ask for your honest truth, speak to them and tell them, this is what your experience is like. That exchange is significant because now I have a marquee name, the big name in the industry, and I can say, “That is my client,” And they’re going to back me because that’s the agreement. Now, every other client is so much easier to get and I can come out hitting premiums. I don’t have to fight my way up, start at a low price point. There is no negotiation, I got the number one client, you can be the number two and I’d start using that to foster a lot of opportunity.

Robert Leonard (39:30):
You’ve written 6, 7, 8 books or something along those lines.

Mike Michalowicz (39:35):
Seven books, one coming out this Christmas.

Robert Leonard (39:38):
Wow. Quick turnaround.

Mike Michalowicz (39:40):
Yeah. It’s a children’s book. Actually, if you could see it right above my shoulder, there it is.

Robert Leonard (39:44):
I can see that. I’ll have to pick up a copy for my son.

Mike Michalowicz (39:48):
Oh, there you go. It’s called My Money Bunnies. How it came about was, so many people are into Profit First, so I go, “I wish I could teach this system to my children.” And I’m like, “I got to write children’s books.” So this is my first experience writing a children’s book, it has been a blast. It took me about a year to get it done, but it’s My Money Bunnies. And it’s a very simple and hopefully extremely fun way of implementing a profit-first-like system in your personal life as a kid.

Robert Leonard (40:12):
I’ve loved all your books, I’m sure that I’d love that one. And obviously being into money and investing, I’m looking forward to when my son is old enough to be able to have those conversations. So-

Mike Michalowicz (40:22):[inaudible 00:40:22].

Robert Leonard (40:23):
Yeah, it’s going to be exciting. So I actually just signed my first book deal to write my first book. And so I’m excited-

Mike Michalowicz (40:29):
Nice.

Robert Leonard (40:29):
Yeah, so I’m excited. And I’ve actually talked to people from the audience. I know there are actually quite a few people in the audience who are writing their own books too, whether it be traditional published or self-published. What tips do you have for somebody who’s looking to write a book?

Mike Michalowicz (40:42):
Do it. I think the world is starving for great books. Let me put a little asterisk next to that. I don’t think the world is starving for more books, I think the world’s starving for great books and there’s a huge churn in books. So go for it, but put everything into it. Put your soul into this book. And my other tip is, give it all away. I think one of the fears people have is when they write a book, if you give everything away, every ounce of your knowledge, you’ll never get an opportunity beyond the book itself. But here’s what I’ve experienced. I put every ounce of my knowledge, hopefully, presented as concisely and effectively as possible in my books and as entertainingly as possible, in all my books, I found there are two types of readers. There is a community of, do it yourself-ers. And that’s the 99% community.

Mike Michalowicz (41:28):
Most people are reading books simply because they are seeking answers, they are your best marketing force. If you put everything you know in your book, that community will tell other people saying, “This book has all the answers and they will perpetuate the marketing.” 1% of the readership reads a book and says, “Now I found my source. I don’t want to do this. I know this guy knows how to do it.” And they come to you for more. Because I put everything I know in Profit First, everything I know in Get different, we have an unbelievable amount of people calling and saying, “I just want to do this book but I want to do it right. So I want you to do it for me.” So it’s built businesses behind it because everything’s in it. And the vast majority has already shared, but people are just perpetuating concepts because they’re doing on their own, successfully because everything’s in there. So put everything you know into it, and the likelihood of success I think is a multiple over cutting a book short.

Robert Leonard (42:19):
At the end of every episode, we have a segment called the action plan. And in this segment, I like to give people who listened to the podcast, three different things to go do when they’re done listening to the podcast. I think too many people read books or listen to podcasts or just consume educational content and then not actually take action on it. So my plan with this action plan is to get people to actually take action. And so the three things are a principle or habit to implement in their life, a book they should read. And then the very first step or action they should take when they’re done with this episode. So first one, which habit or principle do you follow in your life that has had a big impact on your success, that not enough people do, but should?

Mike Michalowicz (43:02):
Random acts of kindness, hands down. Actually just yesterday, I just went around our community and was just picking up garbage for an hour. And here’s what the power of a random act of kindness, it feels good doing it. And I think what you’ll realize is when you put things out, through your business and so forth when you feel that reward of just doing feels good, amazing things come back to you. I believe actually marketing is the ultimate act of kindness because when we have a great business or service and we put that out there when you market it and put it out there, you are being kind. But it’s also scary, as we talked about earlier, it’s scary to do different and get noticed because of that reptilian part of our brain. Random acts of kindness, start building that muscle. So start doing that immediately and never stop. And again, listen, it doesn’t have to be big stuff, you could put a quarter in a parking meter. You can just say a friendly comment to someone when you’re walking by, but just keep doing that, and it’ll build that muscle.

Robert Leonard (43:58):
I’ve actually been doing that a bit myself lately. I was at a gas station the other day, I had to pick up a case of water and I’m waiting in line. And this woman walked in. She was very distraught and she had asked the cashier if anybody had found her money. Anyway, she ended up apparently lost like $500 of cash on the ground or something from the ATM. And she started crying and she’s like, “I don’t have enough money to fill my gas tank, I’m literally stuck in this gas station.” I went over and I filled her tank for her and-

Mike Michalowicz (44:26):
Love it.

Robert Leonard (44:28):
I don’t want any pat on the back for that. But the point is after I left and I did that… It was like 50 bucks, not the end of the world. But after I left that, I was just so motivated. And I did it for her, but I was so motivated that, that was probably one of my most productive days that I’ve had in a long time because of that random act of kindness for somebody else.

Mike Michalowicz (44:45):
And how good you feel and how good she felt. It’s funny, I was in a situation too, I was driving somewhere and stopped by a place to get a bite to eat. There was a line. And there were these two guys, young guys at the front of the line, ordering food. And they were trying to pay up and their credit card or debit card wasn’t working. And the guy is trying to make a call and the cashier was getting anxious and they were afraid, it was becoming a bad situation. And so, I don’t know what the food was, it was like 20 bucks. I walked up and said, “Hey, I think you guys may have dropped this, I saw this on the ground.” And I scratched 20 from my wallet and I picked up and said, “I think you guys dropped this.”

Mike Michalowicz (45:21):
And it gives me chills. So they paid for their food. And they were walking away and one guy looks back and he just says, “Thank you.” And I said, “Brother, you would have done the same for me.” And he starts walking and he turns around again and he’s like, “Thank you.” It felt like there was a shift in what he’s going to do for the next person. And that felt good. And it’s a little ways back now, it’s a month later and I still feel the energy of that. The funny thing is, it doesn’t need to be money. The examples you and I gave was a little bit of money. It’s just doing something kind for someone else is such a good experience for everybody.

Robert Leonard (45:57):
That gave me chills as you told that story, honestly. And I had a tiny, tiny one yesterday. I was leaving the gym and I was at a stoplight and there was a guy walking across the street and he looked like he probably wasn’t in the best spot of his life. He looked just sad and angry on his face as he was crossing the street. And he like looked at me quickly and I waved to him, I don’t know why. I didn’t tell myself I was going to wave to him, I just did. And he didn’t do anything at first. And then he walked like five or 10 feet more, and he turned around and had the biggest smile on his face and waved at me and then just kept going.

Mike Michalowicz (46:29):
That’s awesome.

Robert Leonard (46:31):
It was just like the most random thing ever. And it had no money, nothing. I just-

Mike Michalowicz (46:36):
Oh, I’m getting teary now. That is the ultimate exchange. There’s a movie called the Butterfly Effect, which actually I haven’t seen, I got to see the movie. But there’s this concept that a butterfly flaps its wings somewhere and it can trigger a monsoon somewhere else. Who knows, that guy may have been on this downward path, and who knows what the thoughts were going on, and maybe it’s going to result in harm to himself or someone else. And now, maybe it turned and he’s like, “I got potential.” Maybe he delivered flowers to someone. It’s like, you don’t know the effect that can have, but I do know this, it’s a good thing.

Robert Leonard (47:10):
Not to take it on a turn for worse, but there are some pretty crazy stories about the smallest little changes of people walking across the Golden Gate Bridge. There are some really crazy stories about that. Like if you had just said hi to somebody…

Mike Michalowicz (47:23):
Yeah, you can just save a life.

Robert Leonard (47:24):
Yeah. It’s pretty crazy. Mike, what has been the most influential book in your life?

Mike Michalowicz (47:30):
The most influential book of my entire life was, How to Stop Worrying and Start Living by Dale Carnegie, I read that when I was 22. I was actually having heart palpitations at 22 because of self-induced stress. It is I think a pinnacle book on stress management. Listen, if you do therapy and stuff, I actually have done therapy, I did therapy, I think it’s great. This book for the $15… I got a used copy for $2, it was the greatest investment ever. It gives such good tools that are perennial, they live on forever, to navigate stress. And I can’t say I’m stress-free, but I’m so stress-reduced. It’s like, oh my God, it’s been amazing, that book.

Robert Leonard (48:13):
That’s the second book now that I’m going to add to my list from just this-

Mike Michalowicz (48:16):
Oh, you haven’t read that one?

Robert Leonard (48:16):
I haven’t. I haven’t even heard of it.

Mike Michalowicz (48:19):
So Dale Carnegie wrote two pinnacle books, one is called, How to Win Friends and Influence People. It was one of the first books around modern influence techniques. It’s still probably the best book in that category, in my opinion. And How to Stop Worrying and Start Living, it gets a little old English-y because this book is now almost 100 years old, but man, it just works. I think a lot of Anthony Robbins’ work and more modern stuff was all based upon Dale Carnegie’s work.

Robert Leonard (48:43):
Yeah. Warren Buffet actually says that Dale Carnegie’s How to Win Friends and Influence People is one of the most important books in his entire life.

Mike Michalowicz (48:51):
Yeah, that’s probably number top five for me. And How to Stop Worrying and Start Living, is number one.

Robert Leonard (48:57):
When this episode’s over, what is the first step or action that somebody should take to improve their life, career, or business?

Mike Michalowicz (49:06):
So what you can do is one word, starting today call yourself a shareholder. So let me give some context to this. We call ourselves entrepreneurs and business owners, and I love what that stood for, I love what that meant, but it’s become bastardized. There are some pretty big names that say entrepreneurship is about hustle and grind, it’s about workaholism, it’s your grit, and [you] work your ass off mentality. Entrepreneurship was never meant to be the doer, it was the visionary. It was the person who choreograph resources around them. It was somebody who says, “I have an idea and I’m going to take a risk of organizing people and things to make it happen.” It wasn’t about doing the work. It was about effecting change and facilitating the work. In fact, the number one job of an entrepreneur is not to do the job, it’s to provide jobs.

Mike Michalowicz (49:52):
So I think we can take on a new term and that’s shareholder. And I use that myself now. People will say, “What do you do?” And I say, “Oh, I’m an author and a shareholder in these small businesses.” I’m a shareholder of Ford stock, I own like nothing, 100 shares. But as a shareholder, I have two responsibilities. One is I’ve taken risk by investing in the company, I share in the profit. Two, I give strategic direction, vote for the board directors, when there are some other strategic decisions on how we’re directing the company. We, the shareholders, vote for it. As a small business owner, you are a major shareholder, maybe 100%. Or if you have a partner you’re probably 50% or more, you own a lot. And we got to start behaving consistently with that. Give your business strategic direction, and thank you for contributing to our society and taking the risk of having this idea and putting it into action, share in the profit. Call yourself a shareholder and you’ll start acting like one.

Robert Leonard (50:46):
Before we give a hand-off to where people can find you. I like to wrap up the show by turning the tables and letting the guests ask me a question. So, Mike, what question do you have for me?

Mike Michalowicz (50:58):
Well, I’m really curious about being a single dad. When you became a single dad, how did that change you and how you behave?

Robert Leonard (51:05):
It had a huge impact on me. It happened young, so I was 22 when we found out, about 23 or 24, when I actually became a single dad. And so it really impacted me mostly from a mindset and money perspective. And so growing up, all I cared about was money, I just wanted to be rich. I just wanted to be a billionaire, so much so to the point where… Have you heard of superlatives? Like in high school you get best eyes, best smile?

Mike Michalowicz (51:33):
Yeah, the ESTs. Yeah.

Robert Leonard (51:34):
Yeah. So I was voted most likely to be a billionaire in my high school class, which [crosstalk 00:51:39]. Yeah, which is cool because that’s exactly what I wanted. And then I realized over time and mostly when he was born, and as he grew up a little bit and he’s still only three, but I realized that the people with the most money don’t necessarily have the most time and they don’t necessarily have the most control over their schedule and get to do what they want. And I feel oftentimes a diminishing return there of time and money. So it really shifted how much I care about becoming super-wealthy versus having control over my time. And so it’s been a big shift in terms of actually caring about the time, more than the money.

Mike Michalowicz (52:12):
Oh, that’s great. Thank you for sharing that.

Robert Leonard (52:14):
Where can the audience go to connect with you, pick up all your books, read anything you got going on?

Mike Michalowicz (52:20):
The place to go is, gogetdifferent.com, so that’s the brand new book. But I created this resource page for it. The book is titled Get Different, but the website is Go Get Different. And what I think is interesting about this is, I do free resources there, including 100 ways to market your business. So that invisible ink one I shared, that’s one, but there are 99 additional ways to market that are different. They cost nothing or very little, but they’re great experiments to get started. And I think if you have a business that does good things, you have a responsibility to market accordingly. And I hope that script at gogetdifferent.com will help you do exactly that.

Robert Leonard (53:00):
I will put links to all Mike’s different resources in the show notes below for anybody that’s interested. I’ve gained a lot from the books and all the resources he’s given away over the years, so I highly recommend you guys go check it out. Mike, thanks so much for joining me.

Mike Michalowicz (53:14):
Oh, thank you brother, it’s has been a joy.

Robert Leonard (53:17):
All right guys, that’s all I had for this week’s episode of Millennial Investing. I’ll see you again next week.

Outro (53:24):
Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday we teach you about Bitcoin and every Saturday we study billionaires and the financial markets. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only, before making any decision consult a professional. This show is copyrighted by The Investor’s Podcast Network, written permission must be granted before syndication or rebroadcasting.