Raised in Boonton, NJ, Mike Michalowicz is an entrepreneur who truly believes that starting a business with fewer resources can actually work to your benefit and lead to better business success. In 1996, at age 24, Michalowicz started his own business, Olmec Systems. Starting with limited resources and no experience, he systematically bootstrapped his multi-million dollar technology business. Michalowicz eventually sold his first business, started another business and in less than 3 years, sold his new business to a Fortune 500 company.
Michalowicz now runs Obsidian Launch, a company which partners with first time entrepreneurs to help them get their businesses going. He also runs a blog which gives entrepreneurial advice, and recently published a book; both are named The Toilet Paper Entrepreneur. Through his book and his blog, he shares unconventional wisdom on how to run a business and deal with the many challenges that a business owner faces. In addition to his entrepreneurial ventures, Michalowicz has been a reoccurring entrepreneurship expert on CNBC’s the Big Idea and hosts a business reality show called Bailout!
I got in contact with Michalowicz, by phone, to interview him about his business ventures and how he became a successful entrepreneur.
MC: What did it take for you to officially decide that you must absolutely make a drastic change in your finances and become a millionaire? What drove you to make that definite decision?
MM: This may sound bizarre, but it took a lot of beer. For a while I was on the edge of becoming an entrepreneur, but I was always scared of making the leap. It was like this constant tug-of-war in my head. Well one night I went out for some beers with a friend. After firing down a few cold ones I had enough “liquid courage” to make the leap. I wrote my letter of resignation from my employer that night and had started my new business that next morning. I think we all need a push when we face a fear, and I don’t think beer has ever been the push for me in 100s of fearful moments, it just happened to be for me this one time.
MC: So, how did you create a multi-million dollar business when you started with limited resources and no experience? What were the key steps that you took to allow you to do this?
MM: It was all about drive and commitment. I don’t care what you hear about over night successes and get rich quick stories, they don’t happen. I mean I have built three multi-million dollar companies, and all took overwhelming amounts of effort, commitment and sweat. In my opinion if you aren’t ready to bang out 12 hour days 5 or 6 days a week for years, I question if you will able to be a category leader. You see, the key to success is being passionate about what you do… having a total love for what you do. Passion begets persistence… And persistence begets success. The formula is that simple.
MC: I read that you believe creating a business plan is a waste of time. Would you say that you’re completely against the idea of companies creating business plans? Isn’t this contradictory to what a lot of the business experts out there say?
MM: I am completely against the traditional business plan. It is the static document. It projects financials for 3 to 5 years out, which never come true. It documents all the big names on the dream team, who will never be working as hard as the entrepreneur—in fact they will probably not even show up. The best way, in fact the only way, to plan for a business is dynamically. All successful entrepreneurs that I know use a plan that is constantly adjusting to outside factors. The version I recommend is a 3 sheet strategy. It includes the ultimate goal of the entrepreneur, a dynamic adjusting strategy, and a constant health monitor. These 3 documents, which are living documents, work amazingly well—and I share all the details on how to do it, in my book The Toilet Paper Entrepreneur.
MC: How did you go about becoming a reoccurring panelist on CNBC’s the Big Idea with Donny Deutsch? What was that experience like?
MM: That show was AMAZING. I loved being on there and loved the concept of the show. I became a reoccurring guest because I had a unique vantage point and could present it concisely. The key to TV is being concise.
MC: From watching your videos, you seem like a really funny guy. Do you think a great sense of humor is an essential trait that every successful entrepreneur must have?
MM: Nope, I don’t think humor is an essential trait. I think being genuinely 100% yourself is the essential trait. Too many of us are trying to play into a role we think we are supposed to play. The key is to play 100% into the role your heart calls for. Deliver on it unabashedly… and it will reverberate with the right people. The humor you see, is 100% me. My friends from college and even grade school reach out and say “that’s 100% you Mike.” That is the greatest compliment anyone can get—that you are you 100% of the time.
MC: Like we all know, a lot of people who really want to become successful and talk about becoming successful, never make it happen. What are the main reasons for why so many people struggle to reach their goals? What’s the ‘Mike Michalowicz Method’ to faster goal achievement?
MM: I think the reason most talk and never achieve is because they are focused on the wrong definition of success. Almost everyone is focused exclusively on the money, and that is the biggest mistake. Don’t get me wrong, money is extremely important, but it is a big second to the true definition of success—BEING HAPPY. The successful people get it. They do what makes them happiest. They do what brings them the most satisfaction. Then they build a business model around it that makes money. And because they do what they love, they excel, and they get rewarded with a lot of money. When ever I start something, I ask myself, “will this make me happy?” only after answering that with a definitive yes do I question “…and how can I make money at this?”
MC: There seems to be a mixed outlook on how entrepreneurs should run their business during hard economic times. Some successful entrepreneurs say to be more cautious and modest about sales projections and business growth, while others are suggesting that we completely ignore all this talk about the recession and just proceed as if there isn’t a problem. What’s your take on running a business during a recession?
MM: A recession? What recession? That’s how I approach entrepreneurship focus on what I can control and ignore the uncontrollable stuff everyone is facing. After all, if we all have the same problem, the playing field is level—and it doesn’t represent a problem.
MC: As an entrepreneur who started with no experience, what tips can you give to aspiring entrepreneurs, who in their teens and early 20s, about starting a business without any formal experience?
MM: Hands down surround yourself with people who have been-there done-that. You can navigate around business stopping problems, by learning from someone else as opposed to learning it yourself through direct experience. Plus their positive influence will keep your juices flowing through the dark days. I can’t tell you how important this is—surround yourself with successful entrepreneurs—it is a game changing advantage.