Confident that he had the formula to success, he became an angel investor… and proceeded to lose his entire fortune.
Then he started all over again, driven to find better ways to grow healthy, strong companies.
Mike is now running his third million dollar venture, is a former small business columnist for The Wall Street Journal; is the former MSNBC business make-over expert; and is a popular keynote speaker on innovative entrepreneurial topics
And along the way he channeled his business wisdom into three popular books: Profit First, The Pumpkin Plan, and his debut bestseller, The Toilet Paper Entrepreneur, which BusinessWeek deemed “the entrepreneur’s cult classic”.
Mike Michalowicz Interview
Scroll down for a complete transcript of the interview or click the Play button below to listen to the interview now. And don’t forget to leave a comment to let us know what you thought of this interview!
Books by Mike Michalowicz
Mike Michalowicz Transcript
Tim Knox: Mike, welcome to the program.
Mike Michalowicz: Hi, Tim. Thanks for having me on.
Tim Knox: Great having you here. You and I have a lot to talk about. We were talking on the pre-call and we’re a couple of old entrepreneurs. We have similar battle scars. Before we get started talking about that though, give the audience a little background on you.
Mike Michalowicz: Sure. So I’m a, I want to say retired entrepreneur. I don’t know if that’s the term but a former full-time entrepreneur now turned author. I had the good fortune of growing a couple companies and selling two of them, one privately and then another one to a Fortune 500.
I think the perhaps interesting part of my story was that after selling my second company I thought I was God’s gift to entrepreneurship, this genius. I just became this arrogant schmuck. I admit that now humbly but back then I didn’t even realize it and lost all my money and had to start over again.
It was during that process when I became an author and endeavored to find ways to do things that are better, that are easier and apply to all entrepreneurs because the struggles I had, I don’t think are just mine. You had your own version of it. I think we all have our own versions of struggles so I want to help folks with that.
Tim Knox: One of the things that strikes me about your story, and when I was reading one of your books again I was really relating to everything, but when we do have success whether it is in business or in publishing, there is a tendency to believe your own press. You know what I mean? You’ve got everybody blowing smoke up your skirt and telling you how great you are. Sometimes we start to believe it.
Mike Michalowicz: Yes, that was it. You sell one company and that’s like an anomaly. You do two and now it’s like, oh, someone’s got the formula here. I remember actually the moment. My friends were saying, “Oh my God, you have the Midas touch. You touch things and they turn to gold.” My sister-in-law said that exact same thing and that was the time it triggered to me in my head. You know what? I do have the Midas touch. I know all of the answers to growing a colossal business. I think I’m the next Steve Jobs here.
That was the moment that my downfall began because I just became full of myself and I believed I was better than other people, better than other entrepreneurs. I clearly wasn’t. I am not. I just started spending money with no regard and as things became desperate as I was losing money… I used to be an angel investor. That was my method of spending money. I now call myself ‘the angel of death.’
As I was losing money I was spending more money behind it. I wasn’t even admitting to my family. I was just spending the money and then the day came. I couldn’t pay the bills. I couldn’t pay the mortgage. I had to tell my family. I was lying through omission. I wasn’t telling them how bad things were getting because of me.
Tim Knox: And that’s a really hard conversation to have.
Mike Michalowicz: Yeah. I came home. It was February 14th, which was Valentine’s Day 2008. My accountant had called me that morning and said, “Hey Mike, I finished your taxes because there’s really not a lot going on. You’re the first corporate taxes I’m doing. You still owe so money.” I think the number was $20,000 or something, which was double what I had in my bank account. I literally went from millionaire status to less than $10,000 in my bank account.
I started shaking. My voice was quivering on the phone. “I don’t have $20,000. I’ve never not paid my taxes. What happens if you can’t pay your taxes?” He thinks I’m joking and goes, “Oh you’re just going to go to jail. 20 years in prison can’t hurt you.”
Tim Knox: Thanks, buddy.
Mike Michalowicz: I’m like, are you kidding me? He’s like, “Are you serious?” “Keith, I cannot pay these.” “Listen, we’ll get you on an installment plan,” which by the way I found to be legalized Mafioso. I mean they hammer you.
I then had to go home to my family. That was the moment. I had to go home and tell them. I came home and I was crying at this point because I was so ashamed of myself, so embarrassed. I told my wife and my three children that everything was gone. The house, everything had to go, the cars, everything gone.
My daughter was nine years old. She ran out of the room and I remember when she ran out I thought, that’s it. I just want to run away. I want to run away. She didn’t run away. She actually came back a few seconds later with her piggy bank and put it down in front of me and she goes, “Daddy, I’m going to help us out.”
That was the most humbling experience of my life, that my nine year old daughter felt the situation necessitated, dictated that she had to help us, and it showed how much she cared. She went and put what was to her, her life, up for the family. It was kind of my wakeup moment that I had to find a better way, and I did.
It wasn’t like things were instantly fixed and I was like I know the solution now. I actually suffered from depression. Unfortunately the recent news with Robin Williams…
Tim Knox: Scary, isn’t it?
Mike Michalowicz: Scary. That shook me to the core because depression and stuff like that is pervasive. It’s everywhere. I never had severe depression. I was what I call functional depressive, meaning just removed myself from all social scenarios. I didn’t want to talk to people. I was ashamed about who I was. I still worked. I decided I’ve got to find a better way. Hopefully I have but that was a great wakeup call for me.
Tim Knox: I think the judge of a man’s character, whether he’s an entrepreneur or not – it’s not what you go through in life; it’s what you do afterwards. I went through similar things as you did and it is very humbling to be this hotshot entrepreneur. I’m like 10 and 1, and that one was a big one. You do think you have that Midas touch and you’re smart and you have people telling you how smart you are.
Again, the same is true in the publishing industry. I’ve talked to 75 or 80 authors by now, and I talk to a lot of them who talk about they had a first book go out and they did very well with it and then nothing. They weren’t the genius they thought they were. What were some of the lessons you learned from that experience?
Mike Michalowicz: Well the big thing I learned was that when it comes to profitability… I think it was Zig Ziglar who said, “Money isn’t everything but it’s as close to oxygen as you can get,” or it’s up there with oxygen or something to that effect. I didn’t realize that. I thought money was something that flows in easily and you didn’t have to make an effort to take it in.
I thought that money, profit in particular, was an event. Sell a company. That’s how I made the vast majority of my money, in the selling part of the businesses. I’m like, oh, that’s how you make your money. I just need to pump and dump my businesses.
Well the learning that shifted is that profit is not an event; it’s a habit. It’s something that needs to be baked into my businesses. We’ve got to make this happen every day. It’s a series of small wins that are important.
I think another thing I learned too is that success has a lot to do with luck. There’s a lot of macro events that we have no control over but if we’re at the right place at the right time, we can hit it out of the park but we had to realize, I had to realize it wasn’t me.
Just one quick story I want to share is my second company was in computer crime investigation. We did forensic investigations and we got part of the Enron trial. We made a huge amount of money on that project but also that put us in the major leagues, if you will, when it came to forensics and we started getting major cases and inquiries. I remember Michael Jackson’s attorney calling us and inquiring about his… he was going through a lawsuit at the time, and these other projects that came – supermodel’s divorce and stuff.
That’s I guess when the arrogance started to build. Whoa, I got this down and I’m such a player. In retrospect I realized I just happened to be in the right business at the right time. I didn’t influence Enron. It’s not like I called those guys and said, “Hey why don’t you guys commit a crime?” They did it and I just happened to be in the right place at the right time to grab that stuff.
Tim Knox: They didn’t need any coaching from you.
Mike Michalowicz: No, they didn’t.
Tim Knox: Let’s talk a little about becoming an author because you went through that and you’re a very humble guy. You’re a great entrepreneur. I mean you keep on going. Even when you fall down you get up and keep moving. At what point did you decide, hey, maybe I should write something down? Had you always been a writer?
Mike Michalowicz: No, never. The funny thing is I don’t know if I even consider myself a writer now, which I know sounds really bizarre when you have a few books out there.
What happened was a friend of mine… I’m in like a mastermind group, a support group is probably the better term, of all entrepreneurs. This was another tough experience. This was about a year after my daughter and the piggy bank. We had a meeting and called it Financially Naked. The idea was to really get intimate with each other’s financials so we could support each other.
These guys were very successful entrepreneurs and they’re going through their numbers. I’m the last person to present. The first guy goes, “Yeah I think my net assets is 10.7 million.” He writes this down. The next guy, “Well I’m about 3 million in total net assets.” These guys are all going and it’s like million, million, million. Then I go up and I write a big zero on the board. I point to it and said, “I wish that was my number. I wish I was at zero. The real number is, and I put a negative 50 in front of it. I have a debt of $50,000 still. I have not a single penny in the bank and most of that is credit card debt.
By the way, I was researching credit card debt and the average American has I think $5,000 in credit card debt. I had 10x that. I never so much in my life wanted to be average.
Tim Knox: You were 10x the average.
Mike Michalowicz: I was 10x the average in the wrong way. So this one guy, his name’s Joe Spano. Joe comes up to me and he says, “Mike, listen. I’ve gone through what you’ve gone through and I know the emotional consequences. I’m going to tell you what you need to do.” He said, “Start journaling.” I’m like, what? “Start journaling. Write this stuff down like a diary. Do it.”
So I started doing it and what I found is for me it was a great solution to struggle with the mental demons. Now instead of just holding it in in this crazy conversation of how pathetic I am going on in my own head, I could put it on paper and I could write down my angry thoughts, how I was angry at God and I was angry at the world’s circumstances. I could just let out these things.
Looking back on these notes they’re just ludicrous but I was finally able to vomit out my thoughts and that started clearing things up. Once I got out of the disgustingness and the shame and started putting it in writing, then the clearer, more lucid thoughts were coming out. Maybe I could have done this better or maybe I should have done that. I started writing down thoughts for my own business, to improve myself. I should really put some of this in a book. That started becoming a book.
I don’t consider myself a writer as much as just someone who needs to learn. When I write my books now people are like how do you pick your topic? It’s partly what I believe people who read my books need to hear but really, honestly it’s what I need to master for myself.
So I wrote Profit First. I started to figure out the formula. I was doing it but I didn’t have it perfect. Now, by writing it, I forced myself to live by the code. I mean I’m the author of the book. I’ve got to live by the code and it’s helped me master it for myself. It sounds bizarre but that’s how it played out.
Tim Knox: I’ve heard this before. The writing, that journaling is therapy. You were going through self-therapy.
Mike Michalowicz: Yeah. It’s funny, my mom got my most recent book. My mom’s awesome; she supports me and buys my books.
Tim Knox: Did you say your mom bought your book? I have to give my mom books.
Mike Michalowicz: My mother’s German and she goes, “Michael! No! I must buy it!” She bought it. My parents are getting up there in the years. Even though I’ve spoken publicly about how I destroyed myself financially, I’ve never spoken with them but it’s in my book. I just had breakfast with her this morning and she’s like, “Oh I’m going to read your book next.” She got it a few weeks ago. “I plan on starting it this weekend.”
I know the call’s going to come on Sunday night. “What happened? Why didn’t you tell me about this? I didn’t know you experienced this.” So I’m bracing for that.
Tim Knox: They say you should never write anything you don’t want your mom to read. It’s kind of funny. My novel, I actually printed off a version of my novel without the F word because my mom is so offended by the F word. God forbid she gets the commercial copy. I’ll be in such trouble.
Mike Michalowicz: I wish I would have talked with you prior. The other books I put the F bomb in there and my mom got PO’d. “Who reads garbage like this?”
Tim Knox: That’s the thing. That’s the one word you never say around my mom. My mom is an 87 year old Southern, I mean had babies in the cotton fields and kept on going, but you don’t drop an F bomb around my mom.
So the first book was Profit First.
Mike Michalowicz: No, my most recent book is Profit First.
Tim Knox: The first one was what?
Mike Michalowicz: The Toilet Paper Entrepreneur.
Tim Knox: Love this book. Tell us about the book.
Mike Michalowicz: So that book is all about getting started. I wrote that book right when I was getting started again. I wrote down all the thoughts and experiences I had of how to start a business when you have nothing or negative $50,000, when you have credit card debt.
So my belief was it takes money to make money. You have to surround yourself with resources and contacts. I called BS on my own beliefs and started the research and figured out ways to be successful in starting a business when you literally have nothing.
So Toilet Paper Entrepreneur, the analogy is when we’re in the bathroom and there’s like three sheets of paper. Everyone’s been in that situation. Everyone’s navigated it successfully but there’s “not enough resources”. If we can navigate that situation and no one talks about it, that’s a perfect analogy for business.
I think most entrepreneurs start up scant on resources. They don’t have enough money by any means but they figure out a way to do it and they don’t talk about it. You don’t see on the cover of Inc. magazine – Mark Zuckerberg started Facebook and grew it all from nothing. No, they talk about how he raised money after he got started and blah, blah, blah.
There’s a lot of this investors come in swooping in, venture capital, angels. That stuff rarely, rarely happens so I wanted to talk about a business that’s been in business from day one and 20 days later and have bootstrapped it the whole way, and this is how you do it. It’s the formula.
Tim Knox: It’s a great book and I love the cover. I actually read the book when it came out. It’s been a few years, right?
Mike Michalowicz: Yeah it came out five years ago.
Tim Knox: I can remember buying that book at the bookstore. I’m a big reader of business books and I’m like is that a roll of toilet paper on the cover of that book? It was really excellent and I really enjoyed it. I actually recommend it to my entrepreneurial students that I teach.
So the process of writing that book. That was really the result of what you learned from your business experiences and doing the journaling. How did you go about getting the book published?
Mike Michalowicz: Toilet Paper Entrepreneur is a self-published book, but here’s the funny thing. I had no experience in books so I thought well first I’ll go to a publisher and get published. I literally called Penguin and others.
Tim Knox: Did you really?
Mike Michalowicz: Yeah I called and asked for the President. I’m just going to do it like I do any other sales pitch. Find who the President is. I call and the guy’s name is Adrian Zackheim and I get through just calling. The way I told him is I’ve got this great idea for a book and I want you guys to be my publisher. It’s called Toilet Paper Entrepreneur. Basically he says, “Are you kidding me? Who are you?” and that was it.
Tim Knox: Nobody calls the President of Penguin Books.
Mike Michalowicz: Yeah, no one does except for this schmuck just because of pure ignorance. That was the feedback not just from him by the way. Everyone I called kind of laughed at me and said, “Your book title is ridiculous. You have platform. No one knows who the heck you are. Your last name is hard to pronounce. You have all things going against you. Good luck. We’d be surprised if you could even self-publish something that horrible.”
Then I didn’t know the rules of self-publishing and I think I broke the rules. One example was I called Barnes & Nobles and said, “Hi, I’m a self-published author and I’d like to have my book in your stores.” “We don’t take self-published authors. Good luck.”
Well I’m not one to take no for an answer so I printed my own books and I, with a group of friends, went to every Barnes & Nobles in New Jersey where I am, New York, Pennsylvania, all this area and snuck books into the stores and started stacking the shelves. Perhaps when you first saw it, it could have been a stacked book.
Here’s the thing that happened. Barnes & Nobles called me like three months later and they say, “We’ve got an issue going on. We see your book going through our system. You’re not registered with us. There’s some kind of mistake. We have enough demand. We’re interested in 3,000 copies. Can you ship them out by next week?” I said sure. “Who’s your distributor?” “What does a distributor do?” “You’re not with a distributor? How are you in our stores? You need a distributor.”
Barnes & Noble then hooked me up with a distributor and lined up everything for me and put my book right next to another fellow named Gary Vaynerchuk, who you may have heard of, who launched a book called Crush It. The day before Christmas I remember going there. My book was on the premium shelf space stacked a mile high right next to Crush It and Toilet Paper Entrepreneur took off in part because of that.
Tim Knox: When I hear a story like that I’m like you’ve got to be kidding me. I’m not going to say you did everything wrong. You did things differently and that’s one of the reasons you were such a successful entrepreneur. It didn’t take stupidity to call the President of Penguin. It took balls. My friend, you had them.
Mike Michalowicz: Yeah balls and maybe ignorance.
Tim Knox: A nice set of ignorant balls isn’t hurting anybody. My wife will tell you that.
Mike Michalowicz: That’s awesome.
Tim Knox: We’ll edit that out.
Mike Michalowicz: Here’s what I realized. Today, I wouldn’t have the courage to call Penguin because I know the rules. I know you don’t do that and so now my own mind starts defeating me. Back then I was like what else do you do? So not knowing the rules allows you to break them much easier. The funny part of that story is my second book was published by Penguin Books.
Tim Knox: How did that happen?
Mike Michalowicz: Well what happens as an author is once you sell a certain volume of books – the magic number seems to be 10,000 copies – that it triggers off some things behind the scenes. You probably know this better than I do.
There’s a thing called BookScan, which is like a Nielsen’s rating for books. They track every transaction. So every purchase that’s made on Amazon, every order that comes through Barnes & Nobles or through independent bookstores, airports and so forth, goes into this Nielsen rating system called BookScan. They then report it back to publishing houses.
Well there’s scouts, for a lack of a better term, at the publishing houses that just watch these numbers. Once you pass a certain threshold, and I think in the business genre it’s 10,000, I don’t know what it is in other genres. When you pass 10,000 books it triggers off saying wow here’s a book that’s selling. Then the publishing house says to themselves, can we capture some momentum and either purchase this book from the author and republish it or do we have an author that may have enough of a platform, enough readership that we can do another book with them?
So they called me and said, “Hey we heard about you and we’d be interested in doing a new book with me.” My subsequent book, Pumpkin Plan, with Penguin was solely through them.
Tim Knox: I love that story as well. The one thing I keep hearing from successful authors is you’ve got to get noticed. You’ve got to do something, whether you screw up or you do it on purpose or someone just happens to see you there. What you’re saying is it’s really a classic story. You went out and snuck these books in, which I love. Why didn’t I think of this? They sold enough that Barnes & Noble hooks you up with a distributor and then Penguin comes knocking.
Tell us about the second book, Pumpkin Plan. What was that about?
Mike Michalowicz: Once I did Toilet Paper Entrepreneur, I unknowingly stepped into two fascinations of mine. One is challenging axioms, beliefs and getting a new perspective. The second thing too is trying it into some kind of analogy, something that many of us are familiar with.
The Pumpkin Plan, I studied colossal pumpkin farmers, those guys that make those pumpkins that are as big as a car. That only represents about 15 of pumpkin farmers. How can they grow these big pumpkins? I was curious. Well I studied their approach and then ran the parallels to entrepreneurs who have grown colossal businesses and found the link. It’s almost uncanny. It’s very similar steps to growing colossal pumpkin as it is a colossal business. So that’s how the analogy came about and the book is about spawning colossal growth but doing it in a very healthy way without funding. Just a natural, organic, explosive growth.
Tim Knox: So this was your second book. By then you were an author whether you admit it or not. How was your process different writing the second book than it was the first?
Mike Michalowicz: So the first book was kind of a hodgepodge of ideas and then I tried to clean up after the fact. It’s definitely a sophomoric type of read. It’s edgy and there’s a lot of F bombs and stuff in there. It’s also representative of my mind at the time. I was kind of thrashing around so it’s not a smooth read.
The Pumpkin Plan was definitely a much more polished read and what I realized is that a book has to have an arch just like a TV show. There’s got to be a beginning and end, and the meat in between has all got to connect.
Toilet Paper Entrepreneur was kind of like if you have a stick shift car and you can’t really get into gear and it’s kind of grinds out a little bit. It still gets you there but it just wasn’t smooth. Pumpkin Plan is a much more polished, smooth read. Ironically, of my three books it’s my favorite. It’s popular but it’s the least popular of the three.
Tim Knox: Do you think it’s because it doesn’t have that edge and is that edge your personality?
Mike Michalowicz: Yeah, the edge is my personality but exploited. I believe we all have idiosyncrasies. One of them is that edge and kind of this self-deprecating sense of humor. That’s not who I am all the time but in my books I play it up. I think we have a responsibility for that. There are certain parts of us that will connect with an audience and we need to play it up.
In Toilet Paper Entrepreneur I really pushed it to the limit. In The Pumpkin Plan it’s still there; it’s just toned back one step. I think Toilet Paper attracted kind of a cult following. I go to a mainstream business community and you say Toilet Paper Entrepreneur and they’re like what the hell are you talking about? It’s these small very kind of lean startup type entrepreneurs who are like, “Oh yeah, I love that book.” So it spoke to a much more of a cult niche following.
Pumpkin Plan was more of a mainstream type of read. I think some of my most earnest readers of Toilet Paper Entrepreneur were calling me a sellout. “You kind of watered down who you were.” It did start playing to a larger audience but the larger audience hadn’t heard of me yet. So Pumpkin Plan is the little engine that could. It keeps on selling, keeps on selling. It gets amazing reviews. It’s just not known. I don’t think the title was a great title. Pumpkin Plan is often confused with Pumpkin Patch so it’s hard to remember and I made a mistake there.
Tim Knox: After the Toilet Paper Entrepreneur, where are you going to go? How involved was Penguin in that book? Did you have an editor that you worked with? What was that process like for you?
Mike Michalowicz: Penguin was awesome, very involved. They give you a dedicated editor. Her name was Brooke and she worked with me for six months straight, I mean literally back and forth. The book was improved because of her but when I believed in something that they were challenging, I respect that they allowed me to keep it in but I fought for it. There’s a couple of things I fought for.
One was at the end of every chapter I write a fictitious story of an example of how this could be implemented. They said, “Mike, why not just write one story? You have 12 stories in here of different businesses but you play the same Pumpkin Plan theme over and over again. It’s already been shared. Why do it 12 times? We want you to remove them and just have one story.” I said, “No, no, no. I want to show different business types – everything from a musician and how they can Pumpkin Plan their business to an accountant to any kind of business.” “Okay, we’ll allow you to keep it even though we disagree.”
The other thing they said was, “This title isn’t a good title. People are going to misunderstand it. We really want you to change the title.” I said, “No, no, no. It’s about pumpkin farmers. It really is the plan that pumpkin farmers use and I want to call it The Pumpkin Plan.” They acquiesced and shame on me for that one. I think I was too stuck into the metaphor and not realizing the importance of a title that people connect with and can easily remember.
Tim Knox: Sure. Was there ever a plan to niche this, for example like what Michael Gerber does with E-Myth for Dentist, E-Myth for Chiropractors? Have you ever thought about niching the Pumpkin Plan by industry like that?
Mike Michalowicz: I have, I have. It hasn’t moved enough volume. Pumpkin Plan to date has moved 30,000 to 40,000 copies in two years. In comparison, Toilet Paper is approaching 100,000 copies now. Michael Gerber’s book, in comparison, has moved probably 2-3 million copies.
Tim Knox: Yeah, probably a lot more than that by now.
Mike Michalowicz: Yeah. E-Myth is such an established book that all these different variations make sense. If you approach an entrepreneur in the street and say Pumpkin Plan they’ll say, “What the hell is that?” If you say E-Myth they’ll say, “Oh I know what E-Myth is.” I’d love to niche it and I’ve thought about it. It’s just the brand of the title isn’t strong enough.
Tim Knox: One thing that interests me there, because I did something similar. I mean I wrote a business book in ’05 but John Wiley published it and one thing I knew at the time was the name is really everything. The cover, the name. You’ve got to have some hook. For example, Larry Winget is a good friend of mine. His persona – the bald head, the glasses, the earrings, the loud shirts and the titles of his books – there’s just a hook there that you have to have, especially if you’re doing something in the business advice genre. You really have to hook them. You have to catch them up front.
That was the second book and you did that with Penguin. The third book, the one that I’m reading now, Profit First – that has a piggy bank on the cover. Any reason why?
Mike Michalowicz: Yeah well that ties back to my daughter. The lesson in that moment on that day on February 14, 2008 was that profit is not an event; it has to be a habit. I endeavored the next three, four, five years to figure it out. Once I got the formula, the Profit First Formula, to making profit a habit, something that happens every day in my business, that’s how the book came about.
It’s an homage to my daughter. That’s why I put that piggy bank on the cover.
Tim Knox: It’s a great book and that had to happen on Valentine’s Day, didn’t it?
Mike Michalowicz: Yeah it had to, right?
Tim Knox: Why not April Fools?
Mike Michalowicz: It was a tough day.
Tim Knox: Let’s talk a little about something you talked about earlier, the word ‘platform’. Now you have a platform because you not only have the books but you do a lot of television, a lot of speaking, TED conferences. How did you build that platform and what’s the importance of that overall to your career as an author?
Mike Michalowicz: I hope every author builds a platform and focuses on it because it is that important. How I did it? It’s like climbing steps. I took many small steps and steps back and then pushed forward again.
The one thing that’s interesting about being an author is unlike my other business experiences is there really isn’t competition. For example, if you and I wrote on the same exact subject, almost an identical book, the more people that read your book, the likelihood of them reading my book increases because if they fall in love with your book then they’ll say, “Is there any other book about this that Tim wrote or other people?” The potential for them to read my book increases.
It’s just weird because in my other businesses, the second my competition was doing business with a client I knew I couldn’t get the business. So realizing that authors are in this unique position of complementing each other and demand for one book increases demand for other books, I’ve set out and endeavored to build relationships with lots of other authors.
I reached out to Seth Godin and he laughs at me when I was writing Toilet Paper Entrepreneur, and Michael Gerber and all these people. They laughed at me. “Who are you, kid? But good luck.” As I’ve pushed and pushed and pushed, I would re-approach them. Sure enough Michael Gerber and I have become friends. I had dinner with him about three months ago down in Mexico. We happened to be at the same event keynoting together and we enjoyed dinner together.
By the way, I challenged him on E-Myth and he does not like that. I disagree with some of the concepts in there.
Tim Knox: How dare you. I know Michael. He does not take criticism well.
Mike Michalowicz: No, he can drop an F bomb harder than any man.
Tim Knox: Oh yes.
Mike Michalowicz: In Mexico louder than I’ve ever heard. He’s sitting there in his white suit with that white hat and just F bombed the hell out of me but he’s a genius. The man is a genius and I respect him at the highest level. But he’s not supporting me. He’s provided me tremendous support endorsing my books, spreading the word with some of his readership. I’ve done the same for him.
I’ve surrounded myself and networked with hundreds of other authors and actively support them because I’ve realized that if Bob Burg, for example, he’s an amazing man. If I promote his books, honestly I’m kind of promoting myself. If his book is a success, and they have been huge successes. Every time someone reads Go Giver, I am convinced that person says, “Holy cow, what else is out there? What else can I read?” and now the chances of them reading a Tim Knox book or Mike Michaelowicz book increases that much.
That’s the strategy. Build relationships. Care for other authors. It really does come back. This isn’t like kind of some serendipity thing, maybe it is, but I’m telling you mechanically this is how it works. You support other authors that you believe are phenomenal, readers will find out about them and they’ll come back to you.
Tim Knox: I really like that concept. Talk a little about the relationship with your readers. One thing about the internet now and self-publishing and that sort of thing is it has made authors more accessible to readers. I know you and I, I think we met online – not a dating site.
Mike Michalowicz: I tried through a dating site but you wouldn’t respond.
Tim Knox: ThisOldFart.com I think. Talk about building those relationships with readers because I think that’s very important for authors regardless of your genre, whether you’re doing business books or romance or vampires. The fact that you are now more accessible to your audience is something that you have to respect and you also have to take advantage of when the time comes to sell a book, does it not?
Mike Michalowicz: It’s everything. I’ve observed it with other authors that readers have become disenchanted because the author does not communicate, does not respond.
For a reader, we as authors have to understand, it’s a very intimate relationship. When someone reads your book it’s a one-to-one experience. They are hearing what’s coming out of your mind. It’s like them sitting down with you for a cup of coffee. It’s a very intimate experience. It’s just the two of you and you’re literally inside their head. You’re in the most intimate part of their soul.
Well for you, the author, of course you don’t have that experience because you wrote the book. You don’t know what the reader’s going through so your experience isn’t as intimate. I think we just have to realize what their feeling is and then cater to it. I know it’s – and I’m air quoting here – impossible to maintain that kind of relationship but I think we have to because it is possible.
I think of my readers there is that special 100, 200 people that are just for whatever reason have become maniacal, engaged fans of whatever I’m doing. I need to cater to those people. So I meet with them, I go out to dinner with them.
I was just in Cleveland doing a speaking engagement two weeks ago. One of my readers said, “Oh Mike, we’ve been going back and forth through email for years. I’m in Cleveland. I wish we could get together one of these days.” I said, “I’m having breakfast tomorrow morning by myself. I got a seat for you.” We went out to breakfast together. I think we need to put ourselves out there like that more than ever. It’s just what readers want and I think rightfully expect.
Tim Knox: Exactly. How is the family now? How old is that little girl with the piggy bank?
Mike Michalowicz: She’s 16. She got her driving permit two days ago. She has already gone over two curbs and one stone in my car but is becoming a better driver very quickly, thank God.
Tim Knox: You better be glad she gave you the piggy bank before she was a teenager. My 18 year old, not so much.
Mike Michalowicz: I told her about what she did and said I’ve dedicated my newest book to you because of that day. I’ll never forget it. She goes, “I don’t know what you’re talking about.” “What do you mean? When you brought the piggy bank. You were nine.” “I don’t remember it at all.” What touched me about that is that means that moment to her was so genuine and authentic. It was just a natural response. It was like filling up for a glass of water. You don’t remember you filled up for a glass of water six weeks or six years ago because that’s just how natural it is. That’s just who she is, the giver like that.
Tim Knox: That’s amazing. It really wasn’t the devastating event that daddy thought it was going to be. She just reacted, got you the piggy bank and now seven years later she’s like what are you talking about?
We’re running out of time here. Let me get one more question in here. For authors out there, especially those that are interested in doing what you do, which is writing for the business genre, speaking, building that platform – what’s your best advice to these folks?
Mike Michalowicz: First of all, do it. Do it, do it, do it. Don’t delay. Most importantly, put every ounce of your heart and soul and knowledge into the book. I know some people have written with hopes of using a book to springboard consulting or whatever so they leave parts of the book out, they leave elements out. It’s an incomplete book and those are books that will ever sell.
Think about your favorite books you’ve ever read. It’s always been something I expect changed your life if it’s been so impactful. I believe put every ounce of everything you know in there and have the book be a standalone piece. God forbid you never sell a single service. Those are the books that are wildly successful.
Ironically, I think for authors who do have a business behind their books, those are the books that bring more business, believe it or not.
Tim Knox: I agree. So what’s next for you?
Mike Michalowicz: I’m working on three concepts. My next book may be about a marketing strategy. Basically I challenge the concept of trying to be better. Every person that tries to sell to me says, “We have better customer service. We have better this and that.” I challenge that better is actually hurting business. We should stop aspiring to be better. That’s one book concept.
The other one is how to run businesses on automatic. A lot of my readers and myself struggle with how do you keep your business going on pure automatic? How do you have a business run when you’re sleeping? Maybe if you go on vacation for six months, how can a business keep running? That’s the other concept.
The third one is just in its infantile stage so I can’t really even say what it is yet but it’s really one of these three book concepts. Starting in this month I’m going to go full on into one of them and writing it.
Tim Knox: Do you ever think about stepping out of that genre and doing something else, maybe a nice fiction book?
Mike Michalowicz: No, no. I don’t like fiction.
Tim Knox: Spoken like a true business author. Mike Michalowicz, the author of Profit First, The Pumpkin Plan and my favorite business book, The Toilet Paper Entrepreneur. How can folks find out more about you?
Mike Michalowicz: I would love if people came by my site. All the free resources are up there. It’s MikeMichalowicz.com. I know that’s a doozy to spell. I’m sure you’ll have a link but you can write any version and Google finds me because it’s such an odd name I have. Try an odd stab at it.
There’s free resources. Of course I have a newsletter but what’s cool about that is if you subscribe… I wrote for the Wall Street Journal for about three years. I have all the archived articles. Well my 10 favorites from there and I can share them with you if you subscribe. So there’s lots of stuff there.
Tim Knox: Very good, and we will put up links spelled out correctly for you. Mike, it’s been a lot of fun. Good luck to you and we look forward to having you back on next time you do something amazing, which I figure will be pretty soon.
Mike Michalowicz: Thanks, brother. It’s been an absolute joy. It’s nice being on your show. Thanks, Tim.