In this episode of The Widest Net Podcast meet Mike Michalowicz, a remarkable entrepreneur and the mastermind behind three multimillion-dollar companies. He is not just an author, but a game-changer in the world of business. Mike’s bestselling books, such as Profit First, Clockwork, The Pumpkin Plan, and his latest masterpiece, All In, have revolutionized the way entrepreneurs approach their businesses.
With a knack for simplifying complex concepts, Mike has the unique ability to make entrepreneurship accessible and profitable for everyone. His expertise has been recognized by prestigious publications like the Wall Street Journal, where he served as a small business columnist, and by major news networks like MSNBC, where he was a trusted business makeover expert. Mike’s mission is simple: to eradicate entrepreneurial poverty and help small business owners achieve lasting success. Get ready to be inspired and empowered as Mike shares his invaluable insights on The Widest Net Podcast.
Here’s what you can expect from this episode:
- Gather ideas for leveraging IP from books and turning it into scalable IP
- Learn Mike’s criteria for identifying great partners
- Get behind the scenes of a successful licensing business model
- Learn another way to think about running a business
Here are the Show Notes.
Here’s the transcript:
Welcome to another episode of The Widest Net Podcast. I am your host, Pamela Slim, and I am joined today by the fabulous friend of mine, Mike Michalowicz. I’m so happy to have you here, Mike. Can I just say that at first?
The generic “I’m happy to have you here, Mike”, but I’m not. I know you’re. I’m thrilled to be with you, and I love that we horse around already. I wish people heard the preamble to this. F bombs.
Making fun of people that are not here. Exactly. Who will not be named? Who will not be named? I don’t know.
Before I read your bio and all that, do you use f bombs? I may just be kind of old school, but I swear like a sailor in my regular life. But I don’t usually swear, like, on podcasts. Yeah, so I noticed. I never swear in front of my children.
Or very rarely, I should say. Yeah, and I’ve started to curtail it more. And the reason is I’ve been on a few stages where it was not appropriate, but I thought it was, and then it kind of changed. It shifted the mood of the audience. I’m like, you know what?
I’m just going to stop using that often. But since you F’d, I f back stronger and harder. Yeah. Well, I love it. I think about it in terms of inclusive practices where I’d never want to do something that would make somebody feel awkward.
But you and I can swear like sailors. Yeah, I love it. I love it. So besides, somebody likes to swear in private, like me. Mike Michalowicz is the entrepreneur behind three multimillion dollar companies and is the author of several business books, including Profit First, Clockwork, The Pumpkin Plan, and his newest book, All In.
He’s a former small business columnist for the Wall Street Journal and business makeover expert for MSNBC. He regularly travels the Globe as an entrepreneurial advocate. So, Mike, first I just want to say to you and your fantastic writing partner, AJ Harper, who’s also a good friend of mine. Love her. Thank you for writing Profit First.
I assign it to every single one of my coaching clients, and I kid you not, knowing the way that you talk about your mission and your desire to just reduce suffering for entrepreneurs, it has radically changed the relationship that my entrepreneurs have had with money and just created so much more ease and cash flow. So I just want to say thank you. Oh, give me goosebumps and a little tears, Will. I love that. I love hearing that.
I really feel that my life’s purpose is to eradicate entrepreneurial poverty. I feel it’s a calling. And AJ has been an extraordinary partner. Every single book I’ve written has been in concert with her. What a freaking raw talent.
You know, what she did is when I wrote my books, I wrote my first book by myself, and I gave it to her, and she was able to take ten words in a sentence and make it seven words or six. It was a far more impactful, better sounding sentence. I was like, my God, she has this talent. She actively writes and edits at the same time. I don’t know what’s going on.
So now we’re at the level. We go, like this last trip, we rented a cabin. The two of us are in a cabin for three, four days, and we’re just riding away. And we couldn’t be more different people, too, which is why I consider her one of my best friends. Core principles are the same, the core values, but just very different expressions of life and the way we experience life.
And that, I think, is the best beauty of all. I think so, too. I think it encapsulates the overall picture. Today, I just want to do a very specific deep dive into your business model. Yeah, let’s do it.
I hope your ears have been burning across the Internet, because I’ve probably talked about you on many podcasts where I’m the guest because it is so powerful to see the way that you have executed. What I see from the outside is this model where you’re super clear in how it is that you write books and why you’re choosing specific topics, where you choose partners to be partnering with for the implementation of the ideas in the book. And you use licensing, I think, really effectively in certification. But everything I see from the outsiDe, including the writing process, is all around the effective use of partners. Yeah, for sure.
So I’ll kind of lay out the model that I use. So, every book I write, what I’m trying to write, is a compendium of books for small business owners. And actually, my next book may be a little deviation from that, but it is specific to small business owners, but it’s their personal cash management. What I found is when you have a healthy business, but an unhealthy personal finances, that will pull down the business or vice versa, they need to work in concert. Every book I write, though, is for this community, and I’m trying to serve a different need they have.
We also have to realize that people buy what they want, and we are responsible to give them what they need. So some people will be introduced to me through Profit First when really they have an efficiency issue, and my book, Clockwork, addresses that, or they may come in looking to just grow. I want more sales, which is something The Pumpkin Plan helps with, but then be moved into this kind of universe of other books. So that’s what I’m trying to do there. Books are foundational in garnering the right community and serving them.
My goal with these books is to give them every ounce of my ability, every ounce of my knowledge, to serve them fully and completely within the book, that they never need anything beyond it. But I also know that a percentage of a community will say, I know this now, but I don’t know if I’m doing it right. They want the comfort and the support of an expert. And so from each book, I’ve built a licensing program where I find who I believe, the authorities in the space. Often it’s people I interview in the process of writing the book.
I’m like, oh, you are the expert. And then I build a partnership with them where I, through the book, will send them opportunities. Someone reads a book, they want to explore further. Clockwork, for example. I’ll say, oh, you need to connect with Run Like Clockwork.
It’s owned by Adrienne Dorison, and in return, I share in a percentage top-line revenue, and they grow the organization. What’s great is I want to find great operators, not necessarily people who are extraordinary marketers. You don’t need to be. I’ll handle the marketing; you handle the operation. And conversely, I’m not a great operator.
I run organizations that do coaching and so forth, directly, personally. And that’s not my gift. I’m good at building brand awareness. So I will find someone else that can operate the business as long as I can contribute by bringing awareness. And then it becomes a win-win.
I love that because it is putting you directly in that line of what you’d like to do. I have no idea how you write so many books in a row. Like, I know you do it with partnership, but do you like writing the books? I do. I love it.
I want to say I love it. It’s a little bit of a necessary, painful process. I love the impact they have. I love the output. To me, it’s like going to the gym.
I’ve never had a single workout in my life. I’m like, “Oh, my God, this is so much fun.” Maybe when you’re playing a game, like a tennis match or something, but otherwise, I’m like, “No.” By the end, I’m like, “Oh, I feel so much better.” So with the books.
I know I have a response. I feel I have a responsibility to put out to the world stuff that can make entrepreneurship simpler. And if I see a way to do it, my golly, I got to write it. And so I write and I write and I write, and it’s usually saki, saki, saki. And then AJ comes in and says, “My God, Mike, I understand what you’re trying to say, but you’re saying it so horribly, you got more marble.”
When I speak, I got marbles in my mouth. When I write, it’s marbles in my writing. I got marbles everywhere. And she just cleans it up. And it’s a very iterative process.
A book for me, and this is what sounds kind of weird, takes usually about, on average, five years. But how can you produce so many books? Right now I’m working on four books in concert and simultaneously, and there are different stages. Why it takes five years is not five years of writing. There is curation of ideas and concepts, testing and deploying them in my own businesses, then building a service organization to test it further with unknown businesses, so to speak.
Then once I have that, I can codify the system, put it into writing, build the stories around it, output the book, and on to the next one. And that’s a five year cycle. That is so helpful. It makes so much sense, too. Having looked up close and personal with AJ, I have a lot of clients that have worked with her and her programs.
That’s awesome. And knowing that there’s so much of this testing process of methods, I get very judgy. I always say I’m an author practitioner where I really write books based on creating models, testing them with real clients, making sure work, and not just, like, making up an idea in the shower someday where it sounds good. That’s what gets me annoyed where I’m reading it. Like, have you actually ever worked with a real person you know.
In the real world? It sounds like you rigorously test the ideas. Do you happen to know Michael Bungay Stanyard? He wrote The Coaching Habit. Great, buddy.
Yeah. Oh, great buddy. Nicest guy on the planet. I love. I was busting his chops yesterday.
He grew a mustache, and I was making so much fun of him. But I was talking to him once. I said, what made the coaching habit such a successful book? And if the listener now has not read that book, my God, read that book. It sold millions of copies.
And I said, what does it? And he goes, I had been doing that for so long, I knew all the nuanced elements. So it wasn’t just a thought in the shower. It was something he deployed. And it’s in the deployment that the nuanced elements are.
So that I think sometimes the core concept stays, but the little implementation elements come about only through implementation. I invited him to speak to some other authors, too. I’m like, tell us what makes a great book? He’s like that. You’ve done it greatly, you’ve done it yourself to great success.
And he goes, then you can document it in a book. I have been friends with them for a long time, so during those three years, I know the journey, which I think is important for people to hear first your process of, even though you might have a book come out every year knowing that it’s five years in development. I was with him as he was like, literally crying from Australia, where he was rejected once again for the third complete rewrite of the entire book. And when you have something that is great, and he’s a fantastic marketer and just enthusiastic, he really is. Earned every sale, right.
Of that book I got you. It’s important to know, I think from the creating really effective, helpful IP is a rigorous process that you want to test. I want to jump to when you talked about the process that you use for identifying your partners, you talked about that as the third step. The fourth is where you’re codifying in the book and releasing it. Do you identify, let’s say, with Clockwork?
I had the luck to work with Adrienne, actually a little bit in the back. So amazing. A couple of years ago. In that process, do you specifically choose your partner that will be your licensed partner before you release the book, or does it depend? Like, how does that process happen?
A little bit of a depend, but usually prior. So when I have a concept, I’ll ask myself, so I’m going to write a book on personal finance. Again, this is deviating from my business books, but it’s necessitated by the struggles that entrepreneurs have. So now I’m like, who are people who are actively teaching personal finance out there and having a great impact? Then I’ll contact them and say, listen, I’m writing a book on this.
And I tell people, I’m not a creator, I’m a curator. I’m a collector of ideas. Profit First, which is my most successful book. It’s an amalgamation of existing principles. It’s the envelope system, the pay yourself first principle.
It’s nothing new. It’s just when it’s assembled, it becomes new. And so I interview these people, and I’ll start assembling it and I’ll come back to them and say, here, from what I learned from you and others, here’s what I’m seeing as actually the common golden thread. And I’ll say, what do you think about that? Some people say, yeah, interesting.
But no, others will, yeah, yeah. That’s actually an enhancement of what I’m doing. I’m like, okay, now we may have something that we can partner on, and I’ll approach them and say, listen, I like to find partners to do the service offering. Would that be something you want to have a discussion around? That’s how I found Adrienne.
I remember interviewing her and it was so funny. I was talking about biomimicry, specifically, taking concepts from nature, translating into business. Talked about beehives, and she cut me off. She goes, oh, my God. She goes, I can’t remember what the term is, but she’s like a “beeologist” or whatever it is.
She studied this stuff and she’s like, oh, yeah, I can see it. I’m like, oh, wow. So there was a compliment in that way. She was willing to expand her practice, her ideas and thoughts. But also we had a common belief system.
And then we negotiate the terms, because I think this is important to your readers, the terms is a flat fee up front, and that’s expanded over time. I don’t want to disclose that, but it’s grown to be pretty substantial. And what that means is these people have to make a serious commitment. Like, do they really want to go all in on this and a percentage of revenue? On the flip side, my job is to bring awareness to the brand, to bring sometimes more credibility or authority, because just the book’s exposure does that, and to bring lead flow.
And not every licensee has worked out perfectly. I had a licensee with Get Different, and after about a year of it, we decided to part ways. That is not my most successful book by any stretch of imagination. It’s a dud, and I’m frustrated by that. And I think I know why now and considering starting that book up again effectively.
But that partnership, we decided to part ways. The nice thing is because that partner and I came from a common ground. It was a very amicable departure. And actually he continues to do some work in the space because that’s the space he originated in. He’s still referenced in the book, his business, and he’s still getting some flow.
But now we have the license back and we’re repackaging book. We’re taking our time deliberately, and then we’re going to find a new licensing partner. Do you have a specific process. Is there like a length of time, a number of questions. What is your actual due diligence and decision making around that?
Yeah, so we investigate their existing business. Do they have a business that’s generating some degree of revenue? And we want to be minimally a small six figure business to a medium six figure business? That just simply means that they’re deploying it consistently. The second thing is, at that size, you probably have one or two employees.
Because I believe that with the books, we can sometimes quadruple these businesses in a short period of time. Do we have ability to scale this business? So do we have something that’s replicatable? So that’s just kind of outlining what we want. Then we test it out and say, listen, let’s do something that is a no obligation thing, but why don’t you start rolling this out?
The benefit to me as the author is I’m going to use these case studies of you deploying it. The benefit to you as a licensee is you can try before you buy. So are we both happy at the end of that? Then we go into the commitment together. I’ll tell you one mistake I made that I will avoid next time is I’ve built the license partnership too early in certain cases, and then there’s a waiting period for the book to come out, and that can be difficult on the licensee.
On the flip side, I’ve done some arrangements after the book’s been out, and the problem there is now we can’t enhance the system through the deliverable side because the book is already out. So I find it’s usually one year to six months before the book is coming out. Really about one year prior that. I want to have a strong licensee relationship so I can test the system for another six months. That still gives me time to tweak the books.
Then six months prior to a book coming out, that’s usually when they’re put into concrete and the printing press begins. Because you said they’re giving a flat fee to you up front. Right. As that partner. Right.
And then you said, in addition to percentage, as things correct, paying a six. Figure flat fee two years prior to coming out. There’s a lot sitting around now. They do get some lead flow just because the universe of my work gets interest. So my next book is all in.
That’s not coming out till January 2 of 2024. As of recording this, this is still two and a half months out. That’s already getting lead flow. That organization is already getting some business. But it’s a little bit here and there.
Typically when a book comes out, a really good launch for me, a really good launch will be about 10,000 units in the first two weeks. A typical launch will be about 7000 units and a little bit on the lower end will be 5000, but even 5000 units in two weeks. Those are individual orders. I’m not a fan of bulk. Bulk is amazing for the revenue, but I want readers, I want people that are actually engaged in a book.
And if someone buys a book in bulk and you get it gifted to you, that’s going in the garbage or the shelf, but if you put down your own dollars to buy it, you’re going to read it. So there’s usually this big ass surge during the first month. People buy the book and they’re reading it and then they’re deploying it. Then what matters is the backlist. Can I get a book that’s moving minimally 500 units a week to ideally 4000, but that’s like atomic habits.
That’s pretty high level stuff. But 500 to maybe 2000, then that business is going to get constant lead flow. What a beautiful thing. Because I know so many people who are amazing operators who do not like to do the other part. So it really feels like the perfect marriage for folks who are your ideal partner and for you.
It’s just so interesting that way. I am curious on the marketing side. And is it portfolio? Your publisher, is that your main publisher? Yeah, I did the first two books.
Yeah, I’ve had a great experience with that. Me too. Yeah, I think they just really get it. And it is interesting, again, going back to this partnership thread with you, that it is a little bit of an interesting model. Obviously, we always need new ideas in the market.
Publishers do want you to be working on multiple books, but as you said, when you have business models connected to each of the books, I just think about, oh my gosh, how do you sort through what keynotes you’re doing? At what time do you have big funnels built? Is there like a whole machine that’s cranking around each book that keeps the sales going? Yeah, there is. That’s funny.
The keynote thing is a challenge, but we have eight employees here. I mean, literally in our physical office we do some virtual stuff, but here that it’s all about book promotion. And what’s nice is there is an alignment. So every licensee wants us to sell more books because that brings in more leads we want to sell more books because books sales beget book sales. You discover one, you may discover another, and it facilitates other income sources, like keynotes and so forth.
So we have a team here, and all in right now is the next launch that is consuming about 50% of our time. All the remaining books is dividing up the remaining 50% of the time. The funny thing is, I consider myself the spokesperson. That’s my job, to do what we’re doing right now, podcasts and stuff, and to get out on stage as the diversity of books increases. I came to the point where I have to restrict it to only four keynotes, four types.
But one of my books Surge. Other ones I don’t talk about anymore, because I just cannot keep all of that going on a speech. We have a mutual friend of Michael Port. Perhaps he was a guy we were making fun of before. I’m not saying, but it’s not a speech, it’s a performance.
And to have four Broadway one person plays in your mind is pretty much the max capacity for me, for sure. It’s like writing and acting in Hamilton for books, just knowing the tactics of what happened behind the scenes. I do imagine that there needs to be a great amount of organization, and I often think about the relational side of business. As you and I know, we’re in circles. We’re friends with lots of folks who can happily promote books.
But then there’s more. The transactional side of building in really specific things like SEO and kind of lead flow. You got to do that. Both those sides. Yeah, you got to do that stuff.
And I think if you’re an author of one book and you’re just starting up, you still need to assemble that team. It can be contractors and so forth, and not necessarily full time people. I think that this mentality of do it all myself, forget it. For me, I like to write with AJ. I like to speak.
I’m not necessarily great at either one, but with the right partnerships, it elevates me. And since I do it with frequency, I have the opportunity to improve on those things. I don’t do the SEO. I don’t maintain our website. I actually didn’t even know we had a website for the all in launch.
And I don’t mean that in a negative way. I didn’t even pay mine to it. I just knew it would be taken care of. And I go, yeah, it’s been up for four months and we already have 400 orders that came through the site or something. This is awesome.
That’s awesome. Let me go out and speak again. That’s what I’m going to do. Yeah, well, and that goes to my passion really in the last probably two years for productized services. I just see more and more for professional service businesses.
It is so hard with all the different options and opportunities to just be doing business in general. So the way that you’ve really thought about a specific way in which you deploy ideas, have partners and then make sure the operations are clear on the other side just makes a lot of sense and you’re living it to give it. That’s the other thing I appreciate is knowing your clock worked right and the inside of your. Yeah, I just think it creates more that natural, the true believability because you’re not on stage talking about know great leadership when everybody knows that you’re a horrific person. Not you, Mike.
Right. Like people you know sometimes because we all see behind the curtain there are folks who might talk a big talk in terms of a topic but not actually live it. And I just think that creates a not good experience for some. I agree that disconnect. I honestly loathe that there are some individuals that put out this persona and it’s not reality.
And I think the good guys, that’s my New Jersey talk. The good guys got to win. So I love to see Pamela Slim’s out there putting out the good Pam. Go Michael MBS. You know Michael Bunkee staying here.
He’s out there. Go Joey Coleman. Go Michael Port. Go. I love rooting that on and I think if we are trying to put good stuff out in the world, by golly, we got to do everything to do that and that’s assembling a team and so forth.
Yeah, well, I totally appreciate just sharing the inside of that business model because it is one I think a lot of people can look at and model in their own way. I’m curious, just as you look at the big longer term picture, you said you have a whole number of books that you’re writing right now and you want to continue to write. Do you know where the end is? Do you have the set of books that you’re going to write something else? Yeah.
AJ rolls her eyes every time. I feel like it’s 25 books and it is a number picked out the air. I’m eleven books in. I’m nine titles in because two books were revised and expanded but they are completely different books. It was whole.
Tear down the studs, rewrite the book its entirety. But it is a random number. I just know that there are more topics that may be asked about now than ever before in the entrepreneurial space, and I have an opportunity to satiate those questions. I suspect the day will come that I’m irrelevant or the more questions are coming in and that’s the day to transition for me. Hasn’t come yet, but I know it’s coming.
I love that. Well, where’s the best place for people to learn about all of your books and partnerships? The best is my website, but I’ll give you a little hack here. It’s Mikemikalowitz.com. No one can spell it, so go to Mikemotorbike.com now.
Why I have Mike Motorbike, as in the motorcycle is. That’s a nickname I got in grade school because it rhymed. It’s the only G rated nickname I ever got. I have a lot of X rated ones I cannot share. You can’t even buy those domains.
But if you go to Mikemotorbike.com, every book I have chapter downloads and I call them the impact chapters. It’s not like oh, chapter. It’s, it’s the stuff that will, I think, transform you. I used to write for the Wall Street Journal in concert with AJ for a couple of years. That’s available there.
And I have a podcast archive you can check out, too. Mikemotorbike.com. I love it. Creative way when people might stumble a little bit over the spelling of your so. And I’ve never driven a motorcycle, this little trivia fact there, but it’s very.
So that’s the idea. I appreciate you taking your time so much and sharing so generously, Mike. For those listening, be sure to check out the show notes at pamelaslim.com under our podcast tab, I want to thank my 31 Marketplace production team, La’Vista Jones, Tanika Lothery, Jose Arboleda, and our award winning show narrator, Andia Winslow. Until next time, be sure to subscribe and continue getting inspiration to help grow your world changing work at scale.